A French flag flutters on top of the National Assembly ahead of a confidence vote that the French Prime Minister Francois Bayrou seeks on the budget issue, in Paris, France, September 6, 2025. Picture taken with a long exposure. REUTERS/Abdul Saboor
French President Emmanuel Macron and French Prime Minister Francois Bayrou attend a farewell ceremony to former Chief of the Defence Staff of the French Armed Forces Thierry Burkhard, in the courtyard of Les Invalides, in Paris, France September 5, 2025. Christophe Ena/Pool via REUTERS
FILE PHOTO: French Prime Minister Francois Bayrou speaks during the questions to the government session at the National Assembly in Paris, France, June 10, 2025. REUTERS/Sarah Meyssonnier/File Photo

By Elizabeth Pineau and Ingrid Melander

PARIS (Reuters) - French Prime Minister François Bayrou lost a confidence vote in parliament on Monday, plunging the euro zone's second largest economy deeper into political crisis.

Here is what you need to know:

WHAT HAPPENED ON MONDAY?

Bayrou, as expected, lost the confidence vote, with 364 votes against him and 194 in his favour.

WHAT HAPPENS NEXT?

Bayrou will submit his resignation to President Emmanuel Macron on Tuesday.

Then, it's all in Macron's hands.

He has so far resisted the idea of calling a snap election and appears set on proposing a new prime minister, possibly turning to the centre-left. There are no rules governing whom Macron must choose, or how quickly.

If Macron takes his time, Bayrou could stay on for now in a caretaker capacity.

The far-right National Rally and hard-left France Unbowed parties are pushing for a snap parliamentary election - and for Macron to resign.

A government source said last week Finance Minister Eric Lombard, Socialist former Prime Minister Bernard Cazeneuve and Court of Auditors chief Pierre Moscovici - also a long-time Socialist - were among names circulating as possible choices for the next prime minister. Other sources have mentioned Defence Minister Sebastien Lecornu.

WHAT ABOUT PROTESTS?

Beyond the fate of the government, France faces a tense September:

- On September 10: the grassroots Bloquons Tout ("Let's block everything") movement, which has grown on social media, plans nationwide protests.

- On September 12: Fitch Ratings will review France’s credit rating. A downgrade is possible if the crisis deepens.

- On September 18: Trade unions are due to hold strikes and protests.

HOW DID WE GET HERE?

Politics has become increasingly fraught in France since Macron bet big by calling a snap parliamentary election in 2024 which resulted in a deeply fragmented parliament.

Macron's control over parliament weakened as France's debt ballooned, in part due to his largesse during the COVID and cost-of-living crises. France is now under acute pressure to fix its finances. Public debt has climbed to 113.9% of GDP. Last year's deficit was nearly double the EU's 3% limit.

Saying tough decisions were needed, Bayrou, a veteran centre-right politician and Macron's fourth prime minister since his re-election, sought to pass a budget for 2026 that would require 44 billion euros ($51.64 billion) in savings.

This provoked an outcry from opponents. Unable to see a path to adoption, Bayrou called a confidence vote on his fiscal strategy, in a gamble the opposition called political suicide.

($1 = 0.8521 euros)

(Additional reporting by Michel Rose; Writing by Ingrid Melander, Editing by William Maclean and Timothy Heritage)