(Bloomberg) -- Emmanuel Macron is preparing for the possibility of running France with a caretaker government with limited powers for months as he pushes the country into uncharted constitutional territory.
The National Assembly will sit on Thursday for the first time since snap elections delivered a parliament bitterly divided over who should govern. As parties squabble over who should head the next administration, the president has asked outgoing Prime Minister Gabriel Attal to stay on until a clear successor emerges, and his advisers are suggesting that could take some time.
Although jurisprudence suggests the provisional government should focus on ordinary affairs and emergencies, a senior official in the prime minister’s office said it might be able to propose a budget in October if it needs to.
The parliament’s sitting comes the same day as France sold €11.5 billion ($12.6 billion) of debt, its first auction since the second-round of the elections. The uncertainty around that vote raised the specter of unbridled public spending under a far-left or far-right government. While the strong result helps turn the page on a turbulent period for French markets, the premium that France pays over similar debt from Germany remains elevated.
Macron redrew France’s political map when he came to power in 2017 by sidelining the mainstream conservative and socialist parties that used to alternate in power. Now he’s dusting off legal precedents from more than half a century ago to continue governing as his centrist power base crumbles.
His caretaker government now looks set to be the longest since the current constitution was forged by Charles de Gaulle in 1958 at the birth of France’s Fifth Republic.
Attal will stay at the helm of an administration with weakened powers until Macron appoints a successor. But as the New Popular Front alliance of left-wing parties that won the most seats in the election struggles to put forward a candidate, the president is biding his time.
France Draws Solid Demand for First Bond Auction Since Election
While Macron has no obligation to choose someone from the leftist coalition, he’s likely to pick a person with broad appeal who could build majorities on a case-by-case basis to pass legislation and survive no-confidence motions.
How long this should take is not subject to limits, according to constitutional experts, and in the meantime the temporary government cannot be brought down by parliament. In the past, the president hasn’t shied away from using the tools at his disposal to push through reforms despite widespread opposition among lawmakers and on the streets.
Among the first tasks on Thursday will be to elect a new president of the National Assembly. Voting can stretch over three rounds if there is no absolute majority behind one candidate.
The president of the National Assembly is fourth in the line of succession and organizes parliamentary work and directs debates during sessions. How the vote goes may give an indication of the balance of power in the legislature and the government’s political direction.
How to govern in this unprecedented political scenario relies on jurisprudence that’s sometimes more than 60 years old and open to interpretation. If the government does move to initiate legislation, it could be canceled by an administrative court judge.
The caretaker administration can pass laws as long as they are needed to handle “ordinary affairs” and appointments that aren’t politically sensitive, or in emergencies, according to the senior official in the prime minister’s office, who declined to be identified in line with government rules.
The official said Attal could hold cabinet meetings for such decisions or a referendum — as happened in 1962 when the caretaker government lasted nine days after De Gaulle dissolved the National Assembly, according to the General Secretariat.
One of the biggest and most pressing questions will be how to agree the budget for the euro area’s second-biggest economy.
The official said the government can make a proposal for 2025 in the name of the continuity of the state. The budget bill for the following year is typically presented at the cabinet meeting before the first Tuesday in October. The finance bill would then need to be adopted by parliament, which may be tricky now that it’s divided into three groups.
Outgoing Budget Minister Thomas Cazenave said groundwork is already underway, adding that it will be necessary to build support from a coalition of lawmakers spanning both left and right.
“It’s a difficult exercise,” Cazenave told BFM Business television. “French people wanted this diverse National Assembly with three poles, but there is a reality: a country without a budget is a country that is fragile.”
The sitting in Paris comes as the new European Parliament meets for the first time in Strasbourg since it’s election last month. Macron’s dismal result in that vote is what compelled him to call a legislative ballot in France, saying that the rise of nationalists was a danger to France and Europe.
Jordan Bardella — president of the far-right National Rally, which didn’t do as well as expected in the French election yet still had a historic result — spoke in Strasbourg Thursday.
“The European elections in June have given us some stark lessons that cannot be ignored — patriotic forces have been strengthened right across the continent and the centrists, greens and others have suffered,” he said. “Europeans wish to remain true to themselves.”
--With assistance from John Ainger.
(updates with bond auction details in the fourth paragraph.)
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