The future for French Prime Minister Michel Barnier's government looks bleak, with his struggles to push the 2025 budget through a polarised parliament increasingly likely to end in the toppling of his fragile coalition.

A commission of Senators and members of the National Assembly have hashed out a compromise 2025 budget that, if passed by the both full assemblies, could avoid the government having to force the bill through without a vote.

French MPs have spent weeks debating the Barnier government’s hastily prepared budget, which includes €40 billion in spending cuts and €20 billion in tax hikes. The bill aims to reduce the French budget deficit, which is projected to hit 6.1 percent of gross domestic product in 2024.

French stocks and bonds came under fire on Wednesday, driving the premium the government pays for long-term borrowing to its highest since the euro zone debt crisis of 2012, as investors grew uneasy over the fate of the new government and its budget.

The French stock market deepened losses on Wednesday amid ongoing political turmoil, with the CAC 40 index sliding 1.3% at a point to the lowest since 6 August. The benchmark recovered some losses and ended 0.

“This is a very serious moment,” Barnier said in an interview with French broadcaster TF1. PARIS — French Prime Minister Michel Barnier said Tuesday that France could face fiscal calamity should lawmakers decide to topple his government over a budget dispute.

By Harry Robertson and Amanda Cooper LONDON (Reuters) -French stocks and bonds fell sharply on Wednesday, driving the premium the government pays for long-term borrowing to its highest since the euro zone debt crisis of 2012,