French government collapses as political chaos reaches boiling point

• It is the latest political drama to stem from a bleak fiscal situation that caused backlash from financial investors. The UK faced its own economic and political turmoil that forced its central bank to intervene in 2022.
• While an ocean away, it is a warning for President-elect Trump whose fiscal plans are expected to drive the deficit higher.

The big picture: Barnier was ousted after just three months in the job. He was appointed by French President Emmanuel Macron, who called the snap elections that resulted in a deeply fractured parliament with no majority.

Catch up quick: The "no-confidence" vote was called this week after Barnier pushed through an unpopular social security measure without parliamentary approval.

• Barnier's budget proposal, which came against a fiscal backdrop that was worse than initially thought, included roughly $60 billion worth of tax hikes and spending cuts.
• France's far-right firebrand Marine Le Pen has led the opposition against the budget.

• The left-wing New Popular Front alliance joined forces with Le Pen's National Rally to pass the no-confidence motion.

The intrigue: Investors have been dumping French government debt, pushing up the nation's borrowing costs — upping the pressure to get its fiscal house in order.

• The yield on France's 10-year government bond briefly surpassed that of Greece, the country that faced its own devastating debt crisis a decade ago.

What's next: A caretaker government will have to lean on unprecedented measures to avert a shutdown this year.

• Macron will have to appoint a new prime minister.
• That official will begin the budget process again.