FILE PHOTO: French Prime Minister Francois Bayrou gestures as he delivers a speech during the MEDEF union summer forum "La Rencontre des Entrepreneurs de France, LaREF" in Paris, France, August 28, 2025. REUTERS/Abdul Saboor/File Photo

By Dominique Vidalon and Ingrid Melander

PARIS (Reuters) -Prime Minister Francois Bayrou will kick off a series of talks with France's political parties on Monday, seeking to stave off the collapse of his government in a confidence vote next week that opposition leaders said is bound to fail.

Opposition parties have said they will bring down the minority government in the September 8 vote, which Bayrou unexpectedly announced last week as he seeks to push through unpopular plans for a budget squeeze in 2026.

French stock and bond markets fell sharply last week after Bayrou's announcement but recovered ground by Monday.

European Central Bank President Christine Lagarde said that France was solid but that any risk of a government falling in the euro zone was a concern. France has the euro zone's second largest economy.

Bayrou was set to start his talks with the Communist Party on Monday afternoon, before meeting other parties later in the week.

The head of the opposition Socialist Party, Olivier Faure, said on Sunday that the decision to vote against Bayrou was "definitive".

Faure added that he considered Bayrou untrustworthy and that his party would meet him this week purely out of respect for the country's institutions.

The Socialists have made a counter-proposal for the budget, that would see the deficit cut by 21.7 billion euros next year, half what Bayrou says is needed. The Socialists' plan would include more taxes on the wealthy and big businesses.

The far-right National Rally (RN), whose vote is equally crucial if the Bayrou government is to survive, also made clear it would vote against him, as did the hard left France Unbowed, the Greens and Communists.

The parties that have said they will vote against Bayrou together have enough votes to trigger the fall of the government.

Speaking to broadcaster Radio Classique, ECB chief Lagarde said she was looking very attentively at the French bond spreads situation.

French banks have come under pressure, but Lagarde said the French banking system was better placed compared to the 2008 financial crisis.

On Monday, the closely-watched spread between French and German 10-year yields was at around 77 basis points, up from below 70 bps before the confidence vote was called, but down from a peak above 82 bps last week.

French stocks, particularly bank stocks which sold off sharply, have also regained some, but not all, of their lost ground.

Various groups have called for protests against the government on September 10.

(Additional reporting by Alun John and Jaspreet Singh; Editing by Sudip Kar-Gupta and Frances Kerry)