Bonjour et bienvenue to the Paris Edition. I’m Paris Bureau Chief Alan Katz.

For a short while, it seemed like it was going to be relatively smooth sailing for France’s 2025 budget: A draft based largely on the original was sent by the government to the center-right dominated Senate for its imprimateur. Prime Minister Michel Barnier said that he’d “probably” need to resort to a constitutional device to short-circuit a vote in the National Assembly, but didn’t bother to defend that process in more than a sentence or two in an interview a few days later.

That was last week.

Bruising times returned this week for Barnier, French business and bonds, when Marine Le Pen, head of the far-right National Rally, said her party could join with the left in voting for a motion of no-confidence — an alliance that would topple Barnier’s government — should he fail to heed its demand that the budget not hurt consumer incomes. The louder sabre rattling from Le Pen and her lieutenants sent a gauge of French bond risk to its highest in a month and constitutional scholars tried to game out what happens were he to be forced out in the final weeks of the year.

The political instability that’s reigned since President Emmanuel Macron called snap elections in June had already pushed French business confidence into prolonged gloom. Talk of political chaos, no matter how small the probability, is not something to buck up a doubtful corporate investment community or a debt rating agency like S&P, which will update its view on France on Nov. 29.

Barnier and Le Pen are scheduled to meet on Monday morning, but that rendez-vous isn’t likely to fundamentally affect what my colleague William Horobin calls a game of chicken that the two will play between now and mid-December, when Barnier would need to pass a budget.

French Prime Minister Michel Barnier. Photographer: Nathan Laine/Bloomberg

It won’t help France’s economy to have weeks of threatened chaos. We’re already seeing a slump in private-sector business activity, at least based on one measure. Another marker to keep an eye on is the Franco-German spread, which shows investors getting a bit more jittery about holding French bonds.

Still, the budget deadline gives France observers time to ponder whether Le Pen’s threats remain just that in the end or if she’s ready to provoke a real crisis.

Francois Pinault, the octogenarian founder of Kering, is no longer among the 100 richest people in the world as his son struggles to turn around the French luxury conglomerate’s biggest brand, Gucci. Meanwhile, the company is shaking up some of its other brands. 

Antoine Arnault, the scion of the LVMH luxury empire led by his father, plans to turn second-tier football club Paris FC into a rival for Qatar-backed Paris Saint-Germain.

Antoine Arnault, left, and Pierre Ferracci, president of Paris FC Photographer: Nathan Laine/Bloomberg

Thales shares slumped on news that the aerospace and defense supplier is under investigation by UK and French prosecutors for suspected bribery and corruption.

French fuel distributor Rubis SCA is exploring options including a potential sale, according to people familiar with the matter, after its shares slumped by about two-thirds over the past six years.

H, the French artificial intelligence startup backed by billionaires including LVMH’s Bernard Arnault, is preparing for another funding round after announcing its first product. 

Cognac workers threatened to resume strikes next week after LVMH’s Hennessy said it’s studying the option of bottling in China in a bid to avoid tariffs the country recently imposed on European brandy.

Worldline completed a refinancing exercise that will increase the embattled fintech firm’s interest bill but bring in some much-needed cash to help cover upcoming debt maturities.

Monday: Defense ministers from Germany, France, UK, Italy and Poland meet in Berlin to discuss European security situation

Tuesday: Bank of France's Villeroy de Galhau speaks at ACPR conference, and then later at Investir Day conference 

Wednesday: Le Pen's trial over whether she diverted millions of euros in EU funds to build up a platform in France, closes. Judges to announce ruling date

Thursday: Remy Cointreau results

Friday: French November inflation; final 3Q GDP and payrolls; October consumer spending and PPIs; S&P issues review of France's credit rating

When French designer Christian Louboutin bought a secluded house in Melides, Portugal, it was a sleepy coastal area. Less than two decades later, what was once a well-kept secret has transformed into a playground of the rich and famous.

Christian Louboutin’s Vermelho Hotel in Melides, on Nov. 19. Photographer: Goncalo Fonseca/Bloomberg

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