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French parliament votes to oust Michel Barnier’s government

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French parliament votes to oust Michel Barnier’s government

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The French parliament on Wednesday voted to oust Prime Minister Michel Barnier over his proposed deficit-cutting budget, plunging the country into deeper political turmoil.

A motion of no confidence was approved by 331 votes in the 577 member national assembly, as Marine Le Pen’s far-right party teamed up with a leftist bloc to bring down Barnier’s minority government.

Barnier’s administration has collapsed without adopting his contentious 2025 budget that included €60bn in tax increases and spending cuts to reduce France’s deficit, which will reach 6 per cent of GDP this year.

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President Emmanuel Macron will now have to select another prime minister, a task made difficult by a raucous parliament divided into three blocs, none of which is close to having a governing majority.

Barnier’s three-month term as prime minister was the shortest of any premier since France’s Fifth Republic was founded in 1958. It is only the second time a government has been voted down since then. 

The political tumult gripping France comes just weeks after German Chancellor Olaf Scholz’s coalition collapsed, leaving the EU’s two most powerful states in limbo.

Barnier defended his record as prime minister during a national assembly debate before the confidence vote, telling lawmakers: “I have been and am proud to act to build rather than to destroy.”

He said it was “not for pleasure” that he had presented a difficult budget. France’s fiscal “reality will not disappear by the enchantment of a motion of censure”, he added.

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Macron will have to contend with an emboldened Le Pen and her Rassemblement National party, which was decisive in removing Barnier after spurning his last-ditch attempts at a compromise on his budget.

Le Pen said her decision to censure Barnier was prompted by the “necessity to put an end to the chaos, to spare the French people from a dangerous, unfair and punitive budget”.

Macron “is largely responsible for the current situation”, Le Pen told TF1 television shortly after the vote.

When the president appoints a new prime minister, that person would work on a new budget which Rassemblement National “will construct with other forces in the national assembly”, she added.

Mathilde Panot, a leader of the far-left France Unbowed party, slammed Barnier for seeking deals with the Rassemblement National to try to stay in power.

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“Barnier tried to escape censure by choosing dishonour, he has gotten dishonour and censure,” she said.

Marie Lebec, a lawmaker from Macron’s centrist alliance and former minister, said her fellow parliamentarians should put aside party squabbling to find a way forward.

The political crisis risks further spooking financial markets. Barnier had previously warned of a financial and economic “storm” should his government fall without adopting the 2025 budget, saying borrowing costs were on track to exceed €60bn next year, more than the French defence budget.

French borrowing costs on its 10-year sovereign bond hit a 12-year high against Germany’s last week, as investors fretted about the likely failure of Barnier’s government.

After the confidence vote on Wednesday, the euro was flat against the dollar at $1.052, reflecting how the result was widely expected.

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Barnier may stay on as a caretaker premier for a short time, but it will fall to his successor to craft another 2025 budget, ahead of a year-end deadline.

In the meantime, Macron and parliament have several options to pass emergency measures that would avoid a government shutdown and keep public services funded temporarily.

But unlike previously when he procrastinated on picking premiers, Macron aimed to move quickly this time, said a person familiar with his thinking, and he has drawn up a list of potential candidates to succeed Barnier.

The Elysée said Macron would address the nation on Thursday evening in a televised speech.

Barnier was appointed by Macron in September after the president’s centrist alliance lost snap parliamentary elections, which increased the ranks of the far right and leftist parties.

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His departure is a sign of how gridlocked French institutions have become since the elections.

“It feels like a series of impasses in a parliament where no one has a workable majority,” said Bruno Cautrès, political scientist at Sciences Po. “There is a risk that a new government would fall quickly, just as Barnier has done.”

Additional reporting by Ian Smith in London

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Syrian rebels seize Damascus and topple Assad dynasty

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Syrian rebels seize Damascus and topple Assad dynasty

Syrian rebels seized Damascus on Sunday as President Bashar al-Assad’s regime collapsed in the face of the insurgents’ stunning offensive across the country.

The rebels said in a statement that “the city of Damascus is free from the tyrant Bashar al-Assad” and that “Assad has fled” after various factions encircled the capital from the north and the south.

The whereabouts of Assad were unclear, with reports that he had fled, as the rebel onslaught brought an ignominious end to a family dynasty that has ruled Syria for more than 50 years.

Videos sent to the Financial Times by a Damascus resident purportedly showed people inside the presidential palace, rummaging through rooms and smashing pictures of the Assad family.

A man dressed in civilian clothing appeared on Syrian state TV on Sunday morning, declaring that the rebels had “liberated” Damascus, and released detainees from “regime prisons”. He called on fighters to “protect the properties of the free Syrian state”.

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The speaker was flanked by eight other men, also in civilian clothes. Several of the men had their arms around each others’ shoulders.

Residents of Damascus said there was celebratory shooting in the air, with clouds of smoke hanging across the capital.

“I can’t believe it. Everyone is in the street, everyone is shouting,” said Abdallah, a Damascus resident. “It’s something historical. No one has suffered as much as the Syrian people.”

He added that rebel militants were posted outside banks and other public institutions to guard them.

While the downfall of the Assad regime sparked celebrations across Syria, it will also usher in a period of huge uncertainty for a nation shattered and fragmented after 13 years of civil war, and for the wider region. The country shares borders with Israel, Jordan, Iraq and Lebanon. Rebel groups have clashed with each other in the past.  

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The rebel offensive has been led by Hayat Tahrir al-Sham, an Islamist movement that was confined to Syria’s north-west province of Idlib before beginning its offensive 12 days ago. The group, which was once an affiliate of al-Qaeda, rocked the country by seizing Aleppo, Syria’s second city, within 48 hours and then marching southwards towards the capital.

It has been working with Turkish-backed rebels who operate under the umbrella of the Syrian National Army, but Syria is home to myriad factions and the degree of co-ordination between them all is unclear.

As rebels entered the palace, Syrian Prime Minister Mohammad Ghazi al-Jalali said he was ready to work with any leadership chosen by the people and called for unity, saying “Syria is for all Syrians”. “We are ready to co-operate and all the properties of the people and the institutions of the Syrian state must be preserved,” he said. “They belong to all Syrians.”

Jalali said he last had contact with Assad on Saturday evening and has no idea where he is. Soon after he spoke, video emerged of armed rebels leading Jalali from his office to a car.

There was no official statement by the Syrian presidency, the military or state media about Assad or the situation in the country. Al-Ekhbaria, one state-run TV channel, had been broadcasting pre-recorded footage of Syrian architecture set to light guitar music.

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Assad, a London-trained eye doctor, has ruled Syria since 2000, when he succeeded his late father Hafez al-Assad. The civil war broke out in 2011 after his forces brutally sought to put down a popular uprising. 

He managed to cling to power with the backing of Iran, Iranian-backed militants and Russia, which provided vital air power. His regime had regained control over most of the country in recent years.

But he presided over a hollowed-out, bankrupt state and even many among his own Alawite community appeared to have given up on the regime after years of conflict and economic hardship.

When HTS mounted its offensive on November 27, regime forces seemed to melt away, while Russia, Iran and Hizbollah, the Lebanese militant movement, were all weakened and distracted by their own conflicts.

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Rebel fighters cheer from the back of a pick-up truck in Damascus © AFP via Getty Images

Rebels said they had gained full control of the strategic city of Homs, the last major city on the highway south to Damascus, in the early hours of Sunday.

Southern rebels, separate from HTS, took over Deraa, the birthplace of the Syrian uprising in 2011, as well as the cities of Suwaida and Quneitra, over the weekend, encircling Damascus from the south.

The rebel success is a humiliating blow to Iran, which reportedly pulled people out of Syria, and to Russia. Moscow gained access to air and naval bases on the Mediterranean after intervening in the war in 2015.

Russia’s foreign minister Sergei Lavrov had said on Saturday that Moscow would stand by its ally and was “trying to do everything not to allow terrorists to prevail, even if they say they are no longer terrorists”.

Meanwhile, Tehran’s support for Assad had given it a “land bridge” across Iraq to Syria and Lebanon, home to its most important proxy, Hizbollah.

HTS is designated a terrorist organisation by the US, the UN, Turkey and other powers, while Jolani, its leader, has a $10mn US bounty on his head.

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In recent years, Jolani has sought to rebrand the group as a more moderate Islamist movement, building up an autocratic, centralised movement with a tight grip on Idlib, which is home to 3-4mn people.

The rebels said they had freed prisoners from the notorious Sednaya prison, which had become a symbol of the Assad regime’s brutal repression of its political opponents. 

On Saturday, Turkish President Recep Tayyip Erdoğan, who has long backed some Syrian opposition forces, hailed “a new diplomatic and political reality in Syria”.

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New York shooting: Images released in hunt for UnitedHealthcare suspect

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New York shooting: Images released in hunt for UnitedHealthcare suspect

Police have released two new images of a suspect in the hunt for the gunman who killed a health insurance chief executive in New York.

UnitedHealthcare boss Brian Thompson, 50, was shot in the back as he made his way to a conference on Wednesday, in what police believe was a targeted attack.

On Saturday, city mayor Eric Adams said the “net is tightening” around the gunman, who has so far evaded police despite an extensive search and the use of facial recognition technology.

The FBI has offered a $50,000 (£39,000) reward for information leading to the suspect’s arrest.

The latest images of the man being sought are both taken from a vehicle. In one, he can be seen in the back of a taxi wearing a hooded sweatshirt and a disposable face covering.

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In the second, he is seen outside of the car, again wearing a facemask.

The new appeal came as US media reported a backpack thought to belong to the suspect recovered near the scene contained a Tommy Hilfiger jacket and paper money from the board game Monopoly.

Thompson, a 50-year-old father of two, was shot as he made his was to an investor conference in Midtown Manhattan where he had been scheduled to speak later that day.

Police said the gunman first fled the scene on foot, before riding a bike towards Central Park.

The motive for the killing is still being investigated. Authorities have confirmed the words “deny”, “defend” and “depose” were written on the bullet casings found close to the victim’s body – language which could be associated with critics of the US’s private health insurance industry.

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On Friday, a person familiar with the matter told CBS News, the BBC’s US partner, that investigators believed the suspect was no longer in New York City and may have boarded a bus to the city of Atlanta in the state of Georgia.

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Allianz pauses talks with Amundi to form €2.8tn asset management giant

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Allianz pauses talks with Amundi to form €2.8tn asset management giant

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Allianz has paused talks with Amundi and its majority shareholder Crédit Agricole over plans to combine its €560bn investment management arm with its larger French rival, according to people familiar with the situation. 

The two sides had been in on-and-off discussions for more than a year, and were in exclusive talks to form a European giant with almost €2.8tn of assets under management as recently as Saturday morning. Some of the people said the talks could resume at a later date.

The hiatus illustrates the difficulty of pulling off large-scale mergers and acquisitions in asset management and comes as a wave of consolidation is sweeping across the industry, with recent deals including BNP Paribas’s €5bn acquisition of Axa Investment Managers to create a €1.5tn European champion.

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A key sticking point between Allianz and Crédit Agricole has been the structure of any tie-up, according to people familiar with the situation. They have struggled to agree on who would have control of an enlarged entity.

Amundi, which was created in 2010 through the merger of the asset management arms of French banks Crédit Agricole and Société Générale, has grown into Europe’s largest asset manager, with €2.2tn in assets and a €13.75bn market capitalisation.

Assuming a valuation of at least €6bn, Allianz Global Investors would have been worth about half as much as Amundi while having roughly a quarter of its assets. 

But the German group’s parent insurer was only willing to accept a transaction which would have given it a co-leadership role, some of the people said.

Allianz declined to comment on specifics but told the FT that asset management was “strategically integral” to the group and said that Allianz Global Investors was “performing well”. 

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It stressed that it would “only consider inorganic growth opportunities that enhance these strengths and increase our exposure to asset management.” 

A spokesperson for Amundi told the FT on Saturday afternoon: “Amundi is not in discussions with Allianz.” The French group declined to comment further. 

Crédit Agricole is Amundi’s largest shareholder, with a 69 per cent holding. The asset manager has a 29 per cent free float. Crédit Agricole did not immediately respond to a request for comment.

For Allianz, a precondition for any successful tie-up would have been “a shared understanding of partnership at a technical and cultural level”, according to one person familiar with its position.

Others said that while Amundi saw a potential transaction as an “acquisition” of Allianz Global Investors, the Germans wanted a partnership that would help increase its income from asset management. 

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Some people in Amundi’s camp had envisaged a set-up where Crédit Agricole would remain the controlling shareholder of the enlarged asset manager with a stake just above 50 per cent. Allianz would then become Amundi’s second-largest shareholder with a stake of around 30 per cent, and a roughly 20 per cent free float, people familiar with the situation said. 

But the Germans pushed back on this structure as they wanted a more balanced split, the people added. 

More recently, the two sides appeared to have come closer to an agreement. A person familiar with the matter said that Crédit Agricole seemed prepared to dilute its holding below 50 per cent in order to allow Allianz to have a larger stake in Amundi as part of a combination.

Within Allianz, some opposition to an Amundi tie-up has reflected concerns about losing both strategic flexibility and control of its asset management business, while allowing the French side to get the benefit of synergies between the two businesses.

Amundi is one of the industry’s most profitable players, and is seen as having excelled at striking tie-ups with retail banks to distribute its products.

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Investment managers are pursuing scale, growth markets and new clients as margins are squeezed by higher costs, lower fees and the march of large American firms into the European market.

Meanwhile banks and insurers are weighing up their commitment to their investment management divisions and evaluating the merits of doubling down, striking strategic partnerships or quitting the business. 

Earlier this year, Amundi held talks to buy Axa Investment Managers from its parent insurer but was not able to agree terms, according to two people familiar with the situation. In August, Axa announced a €5bn deal to offload the business to banking group BNP Paribas after concluding that it was subscale. 

France’s Natixis, which is majority owned by Groupe BPCE, is also in talks with Italy’s Generali about a potential tie-up, the FT reported last month.

Allianz has in the past held discussions with Germany’s DWS about a potential asset management tie-up, but these are no longer live, according to people close to DWS. 

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