(Bloomberg) -- With the Olympics having come to an end, President Emmanuel Macron will have to turn back to the political crisis that has enveloped France and left the government in a state of limbo.
Macron said he wouldn’t appoint a new prime minister before the end of the Games, arguing that people needed a “political truce” so they could focus on the event.
Following Sunday’s closing ceremony, attention is back on when the French president will end the uncertainty that rattled investors earlier this summer.
A caretaker administration is currently making sure essential business continues, but its scope is limited and it doesn’t have the mandate or political power to undertake anything beyond ordinary affairs or emergencies.
How Did We Get Here?
Macron dissolved the lower house of the legislature, called the National Assembly, on June 9 after his centrist alliance was demolished by the far-right National Rally in a European Parliament election. People sometimes use the European Parliament ballot as a protest vote, which may have led Macron to gamble that he could use the disastrous result to shore up his support in a national election.
Instead, the two-round legislative election that ended July 7 saw support surge for Marine Le Pen’s National Rally, while votes for Macron’s centrists cratered. But due to tactical voting and some unusual alliances, the center and the left were able to make sure the far right only finished third in the parliamentary seat count. Le Pen’s party has also suffered from repeated mishaps during the campaign, including a candidate that appeared on a picture wearing a Nazi cap.
The New Popular Front coalition — which includes the moderate Socialists and the far-left France Unbowed — picked up the most seats, while Macron’s Ensemble finished second, losing a third of its seats. No political group is anywhere close to having an absolute majority that would give it claim to the post of prime minister, whose role includes forming a government.
What’s the State of Play of Negotiations?
Macron is constitutionally empowered to pick a new prime minister, who is typically chosen from the biggest group in the National Assembly. In a TV interview before the Games started, the French leader pledged to wait until after the Olympics before he makes a decision. That means he could make up his mind any time, though many believe he may wait until after the Aug. 15 public holiday to mark the Assumption.
This creates a potential window until the Paralympic Games, which start on Aug. 28 and run until Sept. 8. Meanwhile, political groups are jockeying to build a coalition that could put forward a candidate for prime minister who would be able to survive a no-confidence vote in parliament.
What Are the Possible Outcomes?
The New Popular Front says it has earned the right to propose a premier to build a cabinet after winning the biggest number of seats in the snap election. The group has overcome internal fractures and proposed Lucie Castets, a public servant who works at Paris’s city hall, for the role.
Macron and his allies have indicated they would rather team up with the Republican Right to form a coalition. An informal deal between them has already helped secure the reelection of a pro-Macron lawmaker as president of the National Assembly. The French leader also aims to divide the left to encourage some moderate Socialists and Greens to join his coalition.
Macron aides have privately suggested the new government should resemble a so-called cohabitation, in which the president and prime minister are from rival parties. This indicates he may chose someone with whom he’s not too close such as a moderate politician or a technocrat with a more neutral profile.
Is There a Deal Deadline?
Macron tapped outgoing Prime Minister Gabriel Attal to stay on until a clear successor emerges and the president’s advisers have suggested this could take some time.
How long 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, Macron hasn’t shied away from using the constitutional tools at his disposal to push through reforms despite widespread opposition among lawmakers and on the streets.
How Did the Olympics Play Into the Chaos?
The Olympics and summer holiday period have helped shift some of the country’s attention away from politics for a few weeks. The Games have also helped Macron gain time and allowed him to control the narrative.
After an opening ceremony conducted in torrential rain and initial disruptions from sabotage, the Games went on to be a popular and sporting triumph. France ended fifth in the gold-medal rankings, bettering its Tokyo 2020 result with almost double the tally of overall medals. Even a decision to hold swimming events in the River Seine was vindicated.
Macron is yet to see whether sporting success can translate into political capital.
--With assistance from Tom Fevrier.
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