♪ ♪ ♪ ♪

announcer: funding for presentation of this program is provided by... woman: two retiring executives turn their focus to greyhounds, giving these former race dogs a real chance to win. a raymond james financial advisor gets to know you, your purpose, and the way you give back. life well planned. erika: i love seeing interns succeed, i love seeing them come back and join the engagement teams and seeing where they go from there, i get to watch their personal growth, it makes my heart happy. (laughs) announcer: funding was also provided by, the freeman foundation. and by judy and peter blum kovler foundation, pursuing solutions for america's neglected needs. announcer: and now, "bbc news" d this is "the context." d

>> the prime minister must present the resignation of the government to the president. >> of the first time that a friend prime minister has been brought down by a parliamentary vote in this country since 1962. his government mouth falls and he will have to tender his resignation to president emmanuel macron. >> be assured, i am not afraid. i have rarely been afraid in my life. what is important is that we will take steps towards each other. ♪ christian: no budget, no government and seemingly no way out, friends in crisis tonight with europe looking nervously on for a good friend prime minister michel barnier was ousted in a

no-confidence vote and after just three months of the job. we will be the reaction from both sides. in manhunt on in new york city as the ceo of united health care is targeted and shot dead outside the hilton hotel in manhattan. and what does the resurgence of the civil war in syria mean for russia and iran? we have the security breeze coming off. -- we have the security brief, coming up. ♪ we are seeing two sides of friends this week, the towering notre dame are stored in its majesty but across the river tonight, the removal of a prime minister who has only been in office three months. not since 1960 two has the assembly removed the prime minister, though at the entrance of the parliamentary building are the names through history of the other leaders who were guillotined without much of a hearing. >> [speaking french]

at the christian: end of the debate, the prime minister begged for reason. "do not let the future dictate our present," he said. marine le pen, whose national rally is the biggest party in parliament, have already rejected his budget. out of the chaos that will surely follow, the rally be a route to power and ultimately to the palace, but ithe end, of vote wasn't even close. >> my dear colleagues, the session has started again. here is the result of the vote. majority for the adoption of --, 288 for, 331. the majority required, the first motion is adopted. we don't need to adopt the second one. the completion of the next commission of the project is considered to be rejected, given

the adoption and given the article 50 of the constitution, the prime minister must present the resignation of the government to the president. christian: three 31 mp's out of 574 voting against the rally joining forces with the left bloc, the new popular front. let's go to our colleagues with all the reaction. >> thanks very much indeed. friends has been thrown into political turmoil and economic instability and really uncharted territory. as you say, not since 1952 has a prime minister and brought down by a vote of no-confidence by parliament. that is what has happened with michel barnier. his government has fallen and there are big questions of her with her friends will be able to approve a budget next year. it has a very high deficit and high debt at the moment. big questions over france

's political stability in the european context because of the moment, europe is facing wars on its doorstep with ukraine in the middle east, trumpet, back to the white house in less than seven weeks which is a time where europe will be called to step up and provide a counterbalance to america. yet france , the european union's second st powerful country, has been thrown into a massive political crisis. from the bbc, one of my colleagues also from france, car, please remind audiences why this is happening. >> this is truly a historic day, really, as you said. and the main reason is -- we go back to -- [inaudible] christian: mark, we may have to come back to you because you having problems with the microphone. with me to discuss further what has happened tonight, an

honorary member of parliament and former member in the national assembly, and also with us is a professor of economics at the toulouse school of economics. very good of you to join us tonight. it is somewhat in congress, isn't it? that we have all of this chaos in the very weak france is inviting the rest of the world to the party to reopen notre dame. not a very good deal. [laughter] >> as you said, very unfortunate cause at the time we are about to reopen notre dame france is entering an unfortunate episode and i think it will go on a couple of weeks. i think we are heading into a regime of crisis frankly, because those who have overthrown barnier , whether they want? they want to get rid of macron.

so they will do everything to push him out. and this is something that may come, because they may overthrow the next government once more. so you see, we are entering a very difficult time, unfortunately. maybe we will be like belgium, you know, they have no government and they are pretty proud of it. you know, i just met a belgian banker. he said to me, we haven't any government for now five months on june maybe we will have one at christmas time. maybe we will have the same belgian case in france. christian: yes coat with the greatest respect, you are old enough to remember i think the fourth republic. charles de gaulle brought it about because the fourth was so

unstable, it was supposed to prevent this thing from happening, this stalemate. we have no majority, no elections until july. so what does macron do? >> this is a big point. in fact, he will try to have a new government. maybe you will rename, but i don't think so, michel barnier. he will try to have someone who will go from the socialists, to the republicans and as well to the renaissance, to try to maintain a new government. but, you know, this is a real challenge and i am not so sure that he will be able to do it. so i tell you today, you know, it is the thing that the insurance company used to say, the future is very uncertain. this is the worst thing for an insurance company. so i think today, we have uncertainty ahead of us.

i cannot tell you what will be tomorrow morning, of course the sun will be here. but politically, it's a very difficult time ahead of us. christian: alright, let's speak to emmanuelle, who is alongside. the budget deficit is already twice the level of what is allowed under e.u. fiscal rules, the debt very high. this was a standard austerity package that the prime minister was trying t pass. what happens in the interim without any budget? >> what will happen is tt we will have a budget of 2024, month-by-month, to maintain the government, to avoid a shutdown. we are not the u.s. and that is not necessarily good news, because in this budget especially, the social security provision, the pensions are

indexed on inflation, so it means the pensions will rise, and many french people will be taxed, more than 300,000 will be taxed while they were not taxing the new budget. in some sense, you could say it's not a bad thing because the budget will be frozen. but it's not great because of all of the automatic adjustment. christian: what about the interest on that whopping debt? guest: that is a big problem. this is the confidence of our creditors, half of them are outside france. today we saw the interest rate on our long-term debt in france rising again. last week it went above greece's level and now it is about italy and spain.

so we are in a very bad position because of the amount of debt we have and the need we have to borrow it if the interest rate hikes a lot, we will be for an even further to close our debt deficit and become --. so it is very dangerous for us, especially for budget hindsight. co christian: there has been many a year in france when the so-called republican front has existed. when i talk about the republican front, i mean the main political paies have joined together to minimize the chances of the far-right winning an election. i noticed tonight that mr. barnier when he got to his feet, was criticized because he has negotiated a fair way with marine le pen and has brought her into the mainstream.

is that a fair criticism? guest: i think it is not a fair criticism, in fact, this so-called republican front, it is cynical. because when you see for instance that the former italian minister o health has been elected in his country because there was no left opening to him. so really, it has been something that has shocked the french, because we saw that the so-called front, was in fact a cynical alliance which will not last. so i think it's a very bad thing for democracy, because they really cheated the score. that is what i think this

so-called front will not happen again, because, in ft, it really turned down a genuine majority, even if it was for marine le pen. i think this is what they want. she wants the president to go with a new election, and then she has a chance to come to power. and of course that depends on the french, and not on the so-called allies which are cheating the genuine score. would like to add something. what a fear now is that we are going to have turmoil in the eurozone, because france will be in danger, but the eurozone will be in danger as well. christian: we will come to that very shortly. before i let you go, on that point, in terms of forming the next government, the last

election, people voted for the rally. they are the biggest party in the national assembly, and yet, there are more politicians within the coalition that is the new popular front. so how do you form a government and represent both sides when you have two sides that can't work with one another? guest: well, i believe the parliament by now, and we have to stick with it for at least one year, is totally ungovernable. i mean, one-third is extreme right. one-third is extreme left. the socialists have become totally crazy, they refused -- as the prime minister and refused to sign any compromise of government. and today this is on them, if we are in this situation, which is very unstable. so of course, notre dame -- we had the olympic games without government.

so france will carry on. but this is something we could have done without. in particular, i am a bit concerned with the -- of the household. in france people save a lot, they will save even more with the entity and risk. the population will not invest as much. growth will be slower and the debt will rise because of the interest hikes. so they situation is bad from a public point of view, and i believe the parliament is responsible for that, the extreme right and the extreme left included. christian: good to talk to you both tonight. thank you for your time. i think we have sorted out mark's sound issues in paris. let's go back to mark. reporter: yeah, the political drama inside the national assembly perhaps infecting our microphone as well.

glad we have better quality. now, a big unknown territory for this country now thrown into political instability and economic instability, as we were hearing from your panel. i have just seen a flash that president emmanuel macron is planning to speak tomorrow at 8:00 p.m., the usual time when there are national addresses because it coincides with the main evening news. let's bring in fear anthony dennis, from the bbc. what options now are available to president macron to try to sort out this mess? guest: basically he has 24 hours to try to find a prime minister. that is probably what will happen most likely tomorrow by 8:00 p.m.. he will name a new prime minister. that is the most likely, from what we have been hearing. there are some names from his camp who could please in away, the marine le pen camp.

one of the names is a big figure in the parliament here. he said if the prime minister was himself or someone from marine le pen's camp, it will not last long. so we need to find someone who can bring some stability within different society and the french parliament, try to find someone who could please the far right more for the far left. that is the big dilemma on micron's sake -- on president macron's hands right now. reporter: well, let's pick up on that with a member of the european parliament from the national rally of marine le pen, on the hard right of french politics. fabrice, thank you for joining us. does your pottery want the post of prime minister? guest: good evening. no. in fact, what we wanted to express tonight when voting the motion of no-confidence, was to

protect the french citizens, because our approach, our reading of the budget law was that it was very that fo french people and for the french economy without streamlining administrative services and public services in order to cut bad spending. and now what we expect from the next prime minister that will be proposed by president macron, is that the next prime minister will not only be polite with the national rally, but will also try to understand our points and to get on board as much as possible. reporter: michel barnier was polite to you, i mean, he made big concessions and was in constant contact with marine l pen. he accepted some of her demands. and it seems her redlines kept on shifting. >> yes, our redlines were very

transparent, we pressed to them several weeks ago, in october. the problem was that the parties from -- either that mac ronist party, wanted to blackmail even barnier, so that there was no possible work, while taking on board important proposals that we retain. for example, we attended a counterproposal several weeks ago to replace the budget. we had 57 proposals we presented an marine le pen presented 10 out of these 57 proposals and said that ese are really the redlines, and we expected michel barnier to pick more from our proposals.

reporter: but this country has twice the deficit at the limit of the european moment at the moment. it has a whopping public debt, the third highest in the european union. is this what you call it a responsible move, to bring down the government at this moment? guest: the problem comes from macron. the french people should open their eyes now because this is the legacy we have inherited from president macron. we had these issues before the motion of no confidence was brought. now what we expect is that president macron seriously takes this into consideration. that he appoints a prime minister who respects us. we have 11 million voters who supported us. reporter: fabrice, we are

runng out of time, i am going to have to interrupt you. we are slightly running out of time against the program, but thanks very much indeed for laying out the position of the far-right national rally. back to you in london. christian: thank you very much, we will have plenty more from mark throughout the evening, reaction after the vote. we will take a short break. around the world and throughout the u.k., you're watching bbc news. ♪

♪ christian: welcome back. if you were to look tonight at the spreads, the difference between the interest rate on french debt, and the 10 year german bunds, you will see it is that its largest since 2012's, and that goes all the way back to the greek crisis, and we know what happened to the financial markets at that time. let's get a view then from mohamed el-erian, he is the financial advisor to ellie and

-- allianz. good to have you with us. is it a greek-style crisis or is it not? guest: it is not a repeat of the 2012 european debt crisis nor is it domestically in france a repeat of what the u.k. experienced under liz truss. christian: what set of things have been put in place to stop the run we saw back then? guest: the simplest way to think about this, is that in the old days, every country has to insure itself by itself. and what europe has done very well since the debt crisis, is p ooled insurance. you have the entire pool of the eurozone ensuring other countries. strong institutions, better crisis management experience. so while this crisis will

undermine growth both in france and in europe, while it will lead to higher interest rates in france, it will not be a repeat of the 2012 european debt crisis. christian: but what we do have is a eurozone slow down. we have crisis in france tonight, the german economy stalling as well. how does that affect the u.k. because though we are outside europe, banks are still very much integrated with europe. guest: it impacts the u.k. in two ways. one is trade. europe is still a big market for the u.k., and demand for british goods from the u.k. will be lower than it would have been otherwise, the first thing. the second is slightly broader, it weakens europe as a whole. in particular, it weakens europe at a time when europe has to negotiate with the incoming american administration.

so, the u.k. can fall on either side of this. the one good news for people traveling from the u.k. is that it is a weaker currency, the euro is weaker so holidays will be cheaper. otherwise it has a dampening economic effect. christian: i heard you talking this morning about what could we start eurozone economy. there is a plan in place, mario draghi, the former chief figure at the ecb, he has put together this plan. can you set out why that is being enacted -- not being enacted, and what the problem is? guest: what francie has experienced is this condition where ms. economics increase economic challenges and these charges themselves feed into messy economics, so you end up with this vicious cycle to break. the way to break it is for us to have the economic policies, and

there is a very clear pathway to what is needed to improve productivity, competitiveness, and growth, it is, as you say, a very well written report by mario draghi, the former prime minister of italy. so we know what the solution is, but implement it, you need political leadership. and if you can't get out of the cycle, then you neveret to implement it. what barnier tried to do was a small step towards it, but there was too much fiscal austerity and not enough economic growth elements. and it has failed. so we have to wait for the political leadership that can implement a plan that i think is well-defined. christian: mohamed el-erian, we are up against the brick, great to talk to you as announcer: funding for presentation of th program is provided by... financial services firm, raymond james.

announcer: funding was also provided by, the freeman foundation. and by judy and peter blum kovler foundation, rsuing solutions for america's neglected needs. ♪ ♪ ♪ ♪ announcer: get the free pbs app now and stream the best of pbs.

♪ ♪ ♪ ♪