France's far-right National Rally will force the collapse of Prime Minister Michel Barnier's government unless in a "last minute miracle" he yields to their demands on the budget, its president Jordan Bardella said.
As the political crisis worsened, investors punished stocks and bonds and sold the euro on Monday, with French borrowing costs rising above those of Greece for the first time on record.
The RN, on whose tacit support the fragile coalition government relies, had given Barnier until Monday to yield to its demands - including on pension hikes - or face it backing a no-confidence motion which would lead to the government's collapse.
A no-confidence vote could take place as early as Wednesday. No French government has been forced out by such a vote since 1962.
"The RN will trigger the no-confidence vote mechanism unless there is a last minute miracle if Michel Barnier revises his copy before 3pm (1400 GMT)," Bardella told RTL radio, referring to the time at which parliament is set to vote on the social security financing bill.
If he sees he does not have enough support to get that bill voted, Barnier can choose to use aggressive constitutional powers to force it through, which would inevitably trigger a no-confidence motion from the left.
Parties can also table a no-confidence vote even if Barnier does not choose to use the so-called 49.3 procedure and proceeds with the vote on the social security bill.
Barnier already dropped a planned electricity tax increase last week, which the RN calls a victory, but Marine Le Pen's party also wants him to raise pensions in line with inflation, whereas he had aimed to increase some of them less than inflation to save money.
The RN is calling for planned cuts to medication reimbursements to be scrapped and is unhappy the government may raise the tax on gas. It also wants a reduction in France's contribution to the European Union's budget.
POTENTIAL CHAOS
French government spokesperson Maud Bregeon told CNews television the government remained "open to dialogue" and that it was in the interests of the country that France had a budget and did not fall into financial and economic chaos.
"I'm very worried about what would happen in coming days and months...who will come to France to set up a business or a plant amid such uncertainty?" she asked.
France is facing a difficult financial and economic situation due to the risk its budget may be blocked in parliament, Pierre Moscovici, head of France's public audit office, said.
"Our financial situation today is dangerous," Moscovici told France 2 television.
