Aurelia Butler

PARIS (Reuters) -French lawmakers will vote on Wednesday evening on a no-confidence motion which is all but certain to oust the fragile coalition of Michel Barnier, deepening the political crisis in the euro zone’s second-largest economy.It would be the first French government to be forced out by a no-confidence vote in over 60 years, at a time when the country is struggling to tame a massive budget deficit.The debate is scheduled to start at 4 p.m (1500 GMT) on Wednesday, with voting about three hours later, parliament officials said. Macron, who is on a state visit to Saudi Arabia, is set to return to France that day.The collapse of the government would leave a hole at the heart of Europe, with Germany also in election mode, weeks ahead of U.S. President-elect Donald Trump re-entering the White House. After weeks of tension, the political crisis came to a head when Barnier, who has been prime minister for only three months, said he would try to ram the social security part of the budget through parliament without a vote after failing to win support from Marine Le Pen’s far-right National Rally.Barnier’s entourage and Le Pen’s camp, who had been propping up the minority coalition, each blamed the other and said they had done all they could to reach a deal to trim spending on benefits and had been open to dialogue.”Censuring the budget is for us the only way the constitution gives us to protect the French …,” Le Pen told reporters as she arrived in parliament on Tuesday.The left and the far right combined have enough votes to topple Barnier, and Le Pen has confirmed that her party would vote for a left-wing alliance’s no-confidence bill. The RN’s own no-confidence motion would not be backed by enough lawmakers.Finance Minister Antoine Armand told France 2 TV politicians had a responsibility “not to plunge the country into uncertainty”.RISK FOR LE PENBarnier is due to be interviewed on television news programmes around 1920 GMT on Tuesday. It is not yet known what he is due to say. His draft budget had sought to cut the fiscal deficit, which is projected to exceed 6% of national output this year, with 60 billion euros ($63 billion) in tax hikes and spending cuts. It sought to drag the deficit down to 5% next year, with ratings agencies keeping a close eye on progress.If the no-confidence vote does indeed go through, Barnier would have to tender his resignation but Macron could ask him to stay on in a caretaker role as he seeks a new prime minister, which could well happen only next year. As far as the budget is concerned, if parliament has not adopted it by Dec. 20, the caretaker government could propose special emergency legislation to roll over spending limits and tax provisions from this year. But that would mean that savings measures Barnier had planned would fall by the wayside.The upheaval is not without risk for Le Pen either, who has for years sought to convince voters that she can offer stability.An Ipsos (EPA:ISOS) survey last month showed a majority of French did not trust politicians, with the RN faring slightly better than other parties but with voters still unhappy with how it was behaving in parliament.Some 50% of voters told the survey the RN was dangerous for democracy – albeit 11 points lower than in 2020.A poll by Odoxa showed that 59% of RN voters prefer Jordan Bardella, who is now party chief, to Le Pen, who is awaiting judgment in a trial over alleged misuse of EU funds, which could possibly see her barred for running for public office for five years. She denies any wrongdoing.Macron, who won a second mandate in 2022, cannot be forced out by parliament. His term runs until mid-2027. He precipitated the current political crisis by calling snap elections in June, which he said should help clarify the political landscape.There can be no new snap parliamentary election before July.($1 = 0.9504 euros) More

Below are layoffs and site closures announced in recent months (latest first):FEINTOOL Switzerland’s automotive supplier Feintool on Dec. 3 announced it will close one of its sites in Germany and lay off as many as 200 people.VALEOFrench car parts supplier Valeo (EPA:VLOF) will cut around 1,000 jobs in Europe, sources told Reuters on Nov. 27, adding that the restructuring push will result in the closure of two French plants. STELLANTIS Carmaker Stellantis (NYSE:STLA) on Nov. 26 announced plans to shut its Vauxhall van factory in Luton, England, putting more than 1,000 jobs at risk. It has repeatedly halted assembly operations at its main plant in Italy’s Mirafiori due to low demand, in particular for the electric version of Fiat (BIT:STLAM) 500. The company said it had no plans to shut plants in Italy. BOSCH Bosch (NS:BOSH), the world’s biggest auto parts supplier, plans to cut 5,500 jobs by 2032 in its cross-domain computer solutions and steering divisions, mostly at German sites, and reduce work hours for some employees, it said on Nov. 22.FORD U.S. automaker Ford (NYSE:F) on Nov. 20 said it would cut 4,000 jobs, primarily in Germany and Britain, representing 14% of its European workforce. MICHELIN French tire maker Michelin (EPA:MICP) will shut two sites in western France, affecting about 1,250 jobs, it said on Nov. 5.SCHAEFFLERGerman machine and car parts maker Schaeffler: The , hit by weak demand from auto and industrial clients, said on Nov. 5 it planned to cut 4,700 jobs, mostly in Germany.The restructuring effort would also include closures of the production facilities in Austria and Britain. VOLKSWAGENVolkswagen (ETR:VOWG_p), Europe’s top carmaker, has threatened thousands of job cuts and potential plant closures in Germany as it embarks on tough talks with unions over the cost-cutting push.On July 9, it put on sale its 3,000-people-strong Brussels site for premium brand Audi due to low demand for its higher-end electric cars.DAIMLER TRUCKDaimler (OTC:MBGAF) Truck, the world’s largest truckmaker, said on Aug. 1 it will cut hours and impose a job freeze for employees in its truck-making business in Germany. More

In a note released Tuesday, the bank predicts GDP growth of 1.3% for the year and 1.4% for 2026, down two-tenths below its previous forecasts, respectively. Weaker private sector demand, higher payroll costs, and subdued employment growth are cited as key factors shaping this outlook.“Looser fiscal policy will likely subtract from private sector spending. Weaker private demand and higher payroll costs will likely lead to lower employment growth and wage settlements. Higher prices – though temporary – are likely,” Deutsche Bank senior economist Sanjay Raja said in a note.The UK labor market is expected to soften further. Deutsche anticipates the unemployment rate will peak at 4.6% by late spring, driven by falling job vacancies and rising employer costs due to increased National Insurance Contributions (NICs). Wage growth is projected to moderate, with average pay settlements slowing to 3.75%-4% in 2025 and to 3-3.25% in 2026, down from 5.5% in 2024.Deutsche also expects inflationary pressures to persist, with headline CPI climbing to 2.9% in 2026, up from 2.5% in 2024.“A painful one-off bump higher in price momentum is likely in our view, given higher energy prices, administrative tax changes, and the hike in employer National Insurance Contributions (NICs),” Raja wrote.The report maintains that inflation will return to the Bank of England’s 2% target by 2026.Moreover, Deutsche Bank projects that the UK’s fiscal policy will remain constrained, leading to reduced medium-term spending plans, as outlined in the Chancellor’s upcoming Spring Statement. However, delays in the multi-year spending review could result in increased borrowing or potentially minor tax adjustments.On the monetary policy front, the bank expects a slower pace of easing, with the Bank of England cutting rates four times instead of five in 2025. The first rate cut is anticipated in the first half of the year, with further reductions concentrated in the latter half. Deutsche Bank maintains its forecast for the Bank Rate to reach 3.25% by the first quarter of 2026.“We continue to see Bank Rate at 3.25% in Q1-26. Risks are skewed to a slower easing cycle, and higher terminal rate,” the report states.Meanwhile, house prices are forecast to grow by 2.75% in 2025, supported by favorable credit conditions and steady consumer demand. On the other hand, trade faces headwinds from global uncertainties, including potential tariff escalations under the US’s newly elected administration. More

JERUSALEM (Reuters) – Israeli Finance Minister Bezalel Smotrich said on Tuesday he expects parliament to hold its initial vote on a 2025 state budget delayed by wars in Gaza and Lebanon this Sunday.Smotrich, speaking to parliament’s finance committee, said he hoped to deliver the budget draft to lawmakers on Wednesday with the first of three votes on Dec. 8.A month ago, cabinet ministers approved a spending package that includes a raft of tax increases and spending cuts to pay for the war in Gaza against Palestinian Islamist group Hamas that has entered its second year with no immediate end in sight.Smotrich has come under pressure from the central bank and credit rating firms to quickly pass an austerity package for next year to rein in a wide budget deficit that has reached around 8% of gross domestic product.The budget includes a roughly 40-billion-shekel ($11 billion) package of tax hikes and spending cuts.Israel has had to boost military spending by tens of billions of shekels to meet the cost of wars that have resulted in thousands of troops deployed in Gaza and Lebanon while much of the economy has slowed drastically due to a lack of workers.One bright sign is a ceasefire accord in Lebanon, although it is deeply fragile and there are fears of a resumption of fighting between Israel and Hezbollah.Smotrich had initially hoped for final passage of the 2025 budget by the end of 2024 but he acknowledged that will not happen. As a result, the 2024 base budget will be divided into 12 parts with each allocated monthly next year until the 2025 budget is approved.”I don’t think it’s terrible that the economy will run on a budget of 1/12 in January,” Smotrich told the committee. In response to criticism of a delay in submitting the budget, Smotrich defended his decision and said lawmakers would have ample time for intensive discussions.”The reason I delayed (the budget) is the war. If I had brought the budget too early, we would not have known where the war in the north (Lebanon) was going. Today, we know much more about where we are going. Now the budget will be much more realistic.” All three of the main credit-rating agencies have cut their ratings on Israel this year due to worries that war could continue well into next year. Failure to approve the budget by the end of March would trigger new elections.($1 = 3.6322 shekels) More

This would form part of an overall 4.6 billion euros set aside from the EU’s Innovation Fund to boost net zero technologies and renewable hydrogen in the bloc, the Commission said.European electric vehicle makers face fierce competition from Asia in particular and demand has lagged expectations, which in turn has hit jobs in the region.”As promised, we’re already delivering for European citizens and businesses. We are investing 4.6 billion euros to back cutting-edge European projects in net-zero technologies, electric vehicles batteries and renewable hydrogen,” EU Commissioner Wopke Hoekstra said in a statement.European carmakers have been struggling with weak demand and a slower-than-expected shift over to electric vehicles, while also trying to fend off competition from China. The European Union has proposed raising tariffs on Chinese-built EVs to counter what it says are unfair Chinese subsidies.On Tuesday, Swiss automotive supplier Feintool said it would close one of its sites in Germany and cut its workforce by as many as 200 people due to weakness in demand for electric vehicles and uncertainty over the shift to renewable energy.($1 = 0.9506 euros) More