Lecornu, the fourth prime minister to resign under Macron, faced the challenge of addressing a significant budget deficit while managing a divided National Assembly.

France’s rising borrowing costs reflect its economic troubles. The CAC 40 index dropped by 2%, and the yield on 10-year bonds climbed to 3.6%. Critics, including Jordan Bardella of the National Rally, are calling for the dissolution of the National Assembly, arguing that such action is necessary for stability.

Upcoming elections could further weaken Macron’s legislative power. His earlier decision to dissolve parliament led to fragmentation, with left-wing and far-right parties gaining strength at the expense of Macron’s centrist coalition.

Government Instability

Lecornu was appointed after François Bayrou’s government collapsed. Bayrou faced backlash for proposing cuts to public spending, intensifying fiscal issues. Lecornu aimed to reform the approach of previous administrations but faced opposition from both ends of the political spectrum.

Rather than seeking cooperation, he appointed familiar figures from previous governments, drawing criticism from conservatives and leftists alike. Macron has been hesitant to engage with the leftist coalition that won the most votes in recent elections, complicating efforts to establish a governing majority.

Divisions among the population are evident, especially between those with mortgages and renters. The Albanese government aims to address housing by pledging to build 1.2 million homes by 2029, but opinions on property prices are divided.

Most respondents aged 18-34 are in favour of dropping house prices, contrasting with older demographics more supportive of value increases. Rental households predominantly desire lower prices, in stark contrast to homeowners. Support for rising prices is stronger among Coalition voters and those who support independents.

Government Response

Prime Minister Albanese noted the government’s expansion of the Home Guarantee Scheme aims to ease access for first-home buyers. He highlighted the scheme’s minimal impact on price increases, despite a slight projected rise.

Albanese addressed housing supply challenges mentioned by Reserve Bank governor Michele Bullock, stating that building takes time. He underscored ongoing efforts to boost housing stock through initiatives, including the Build to Rent scheme and renovation of unoccupied homes.

With previous leadership attempts, Takaichi intends to gain parliamentary approval to replace Shigeru Ishiba. Although she belongs to the largest ruling party, the coalition currently lacks a clear majority following recent election losses.

Hosting a meeting with former President Donald Trump is anticipated as one of her early initiatives.

Takaichi is known for her admiration of Margaret Thatcher, discussing their meeting shortly before Thatcher’s passing in 2013. As a drummer, Takaichi’s personality may resonate with voters, though her nationalistic policies, including potential alterations to Japan’s constitution, could alienate some.

Potential Challenges

While Takaichi advocates for increased gender diversity in her cabinet, her conservative policies may alienate female voters.

She stands against same-sex marriage and the option for separate surnames for married couples, stances not widely supported by the public. Economically, Takaichi promotes ‘Abenomics’, pushing for increased spending amid rising living costs and opposing the Bank of Japan’s interest rate adjustments.