Carrefour CEO: French turmoil creates recession risk

Carrefour CEO: French turmoil creates recession risk

French Prime Minister François Bayrou's decision to hold a confidence vote has sparked concerns about the country's economic stability, according to Carrefour CEO Alexandre Bompard. Speaking at a business conference, Bompard warned that the current political uncertainty could lead to a recession, as consumers may postpone their spending decisions [1].

The political turmoil in France has sent shockwaves through European markets, with shares in French banks and other domestically focused companies plummeting. The French CAC 40 index dropped by over 2% on August 26, 2025, following the announcement of the confidence vote [2]. French government bonds also came under pressure, with the yield on the 10-year bond rising to 3.53%, its highest since March [2].

Carrefour, the country's largest retailer, is particularly sensitive to consumer confidence, which has weakened to its lowest level since October 2023. Bompard's comments reflect a broader concern among investors about the potential for prolonged political paralysis and its economic ramifications. The French economy is already grappling with a projected budget deficit of 5.4% of GDP in 2025, which is far exceeding the European Union’s 3% target [2].

The political drama in France is not isolated; it reflects broader European industry trends and carries significant ripple effects across the continent. The crisis highlights the ongoing struggle across the Eurozone to achieve fiscal austerity and manage high public debt, a challenge intensified by political fragmentation and polarization within national assemblies [2].

The immediate future for France and European markets is fraught with uncertainty. The most likely outcome is that Prime Minister Bayrou's government will fall in the September 8 confidence vote, necessitating President Macron to appoint a new prime minister. This could lead to a budgetary stalemate and further political unrest [2].

References:
[1] Reuters. (2025, August 27). French political crisis brings back recession risk, Carrefour CEO says. Retrieved from https://www.reuters.com/en/french-political-crisis-brings-back-recession-risk-carrefour-ceo-says-2025-08-27/
[2] Financial Content. (2025, August 26). France's political turmoil rocks European markets as confidence vote looms. Retrieved from https://markets.financialcontent.com/wral/article/marketminute-2025-8-27-frances-political-turmoil-rocks-european-markets-as-confidence-vote-looms