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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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Omnicom aims for a Mad Men comeback with $13bn Interpublic deal

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Omnicom aims for a Mad Men comeback with bn Interpublic deal

John Wren, the 72-year-old boss of advertising group Omnicom, whose profile is remarkably low in a sector famed for big egos and loud voices, has finally managed to nail the industry-defining deal he has been seeking for over a decade.

With the $13bn deal to acquire US rival Interpublic (IPG), announced on Monday in New York, Wren will hope that he has secured a future for the storied agency network amid the threat of irrelevance stemming from the large US tech companies.

He tried once before with a merger proposed in 2013 with Publicis, which collapsed into one of the largest M&A breakdowns in history. Since then its French rival’s revenues and growth prospects have accelerated, while advertising’s heartland on New York’s Madison Avenue has suffered from a rapid loss of value amid the rise of the West Coast tech sector. 

Now the deal with Interpublic marks a realigning of industry strength back to the traditional Mad Men of New York.

The combined group will leapfrog Publicis — as well as UK-based WPP — who have each previously competed for the global top spot with net revenues of about $15bn each. The global advertising group will have net revenue of more than $20bn and over 100,000 people.

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News of the tie-up comes just days after a publicity stunt by Publicis declaring itself the largest agency by revenues in a PR campaign fronted by rapper and media personality Snoop Dogg.

Publicis had recently declared itself the largest agency by revenues in a PR campaign fronted by Snoop Dogg © Publicis Groupe/YouTube

“I think that will give John an enormous amount of satisfaction,” said one person close to Wren, who helped create Omnicom in the late 1980s, but this year admitted in an interview: “I’m not 30 any more. If I’m going to change the world, I’m going to have to do it quickly.”

Talking to the Financial Times on Monday, Wren said the two sides had been in talks for almost a year. “Its only going to be tried twice,” he added referring to his megamerger plans. “And both times by me. The lessons learnt a decade ago are not going to be repeated.”

One ally said: “John knows he is not getting younger and sees this as the chance for an industry-defining deal before he steps back.” An executive at a rival added: “John has always wanted to be the biggest.”

Wren said he was “not in the least interested in what people think my legacy is” but thought instead that the merits of the deal spoke for themselves. “Bringing us together is pretty extraordinary.”

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Under the terms of the all-share deal he will become chief executive, with IPG’s CEO Philippe Krakowsky becoming co-president alongside Omnicom chief operating officer Daryl Simm.

However, advertising rivals question whether the deal has been struck from a position of strength with Sir Martin Sorrell, founder and executive chair of S4 Capital, calling it “a circling of wagons; two people huddling in the cold”.

A session on the ‘Because you’re worth it’ campaign at the Cannes Lions International Festival Of Creativity
L’Oréal credits McCann, an agency that is part of IPG, with the famous ‘because you’re worth it’ tagline. © Richard Bord/WireImage

“This is a reflection of the pressure on agency fees, people and margins together with the spectre of the impact of artificial intelligence and increased programmatic media planning and buying,” he said.

Industry gossip at the Cannes Lions advertising festival in June was all about consolidation, with IPG regarded as having been on the market for most of the year, according to three senior advertising executives, and both Publicis and private equity groups having looked at it.

But they said only Omnicom progressed with its interest in IPG, which earlier this year lost a key part of its lucrative Amazon work to its US rival as well as to WPP.

IPG’s Krakowsky told the FT that the board’s responsibility was to “assess strategic options” and that the deal with Omnicom was the “most compelling”.

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European rivals — Publicis and WPP — will now be relegated to second and third place, prompting questions about whether or not they also need to bulk up or break up. Publicis has a market capitalisation of about €26.8bn while WPP’s is around £9.6bn.

Interpublic was worth $10.9bn at the end of trading on Friday while Omnicom was valued at $20.2bn. Their shares were up 8 per cent and down 8 per cent in New York trading on Monday, respectively.

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WPP is seen to be a potential target for private equity groups, with complaints among investors that the group as a whole is valued at far less than its operational parts.

“If this deal goes through, it significantly increases pressure on WPP leadership and its board to take action,” said Christopher Vollmer, managing director at MediaLink and partner at UTA. “There’s growing potential for private equity to step in and push for a break-up of the company.”

The combination will also raise new questions over the long-term future of smaller advertising networks such as France’s Havas, which is expected to be listed on Euronext this month after a spin-off from the Vivendi conglomerate, and Japan’s Dentsu. Other executives say that there could also be a deal with S4 Capital, which fended off approaches from US rival Stagwell earlier this year.

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But analysts argue that size is less important than capabilities. Both Interpublic and Omnicom are seen to have particular strengths — and so overlap — in the creative advertising agency sector.

IPG’s Philippe Krakowsky
IPG’s Philippe Krakowsky will become co-president of the enlarged group © Richard Bord/Getty Images for IPG

They will own a number of separate advertising networks, from McCann, FCB and Mediabrands to BBDO and TBWA, which analysts expect will lead to a period of restructuring. Even in PR — a relatively small part of their businesses — agencies will include Weber Shandwick, Golin, FleishmanHillard and Portland.

French beauty group L’Oréal credits McCann, which is part of IPG, with the famous ‘Because you’re worth it’ tagline.

IPG has already streamlined its business — which some executives say was in preparation for a deal — by divesting smaller businesses.

However achieving promised synergies of $750mn would probably mean thousands of job cuts, executives said. “That’s not easy in a people business,” said one. “They are the two least tech-focused businesses so will also need to work on that area.”

Thomas Singlehurst, analyst at Citi, said in a note that the deal could deliver “significant cost efficiencies and benefits of scale, especially in media and technology” but “with the key challenge being potential revenue disynergy from any client conflict and protracted uncertainty for staff”.

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Wren declined to comment on any specific plans to combine agency brands or lose jobs, but added: “We understand that each of our brands has a culture. I wouldn’t wait for the big announcements that we are going to bang together this group or that. We want the best talent to service the client.”

Analysts expect relatively few antitrust issues, especially under a more forgiving incoming US administration, although media agency work in the US may become a focus.

Rival advertising executives were on Monday sanguine about the prospect of a stronger US rival, with one pointing out that a “four to three” merger in effect took out one competitor and reduced pricing pressure.

TV series ‘Mad Men’
TV series ‘Mad Men’: The West Coast tech sector in the US has overtaken Madison Avenue in terms of ad sector growth © Everett/Shutterstock

Others said that scale did not necessarily make much of a difference when pitching for client work, warning that rival agencies would try to poach clients as the two combined and also try to focus more on their own tech and AI investments to find a competitive advantage.

Donna Sharp, managing director of MediaLink and UTA partner, said: “The thesis for this merger can’t just be scale: the market has already shown how it values scale alone . . . clients no longer see scale as a differentiator and sometimes see it as a hindrance.”

Wren said that it would be “shortsighted” for clients to move to rivals, adding that client conflicts are “not the same issue” as they were a few decades ago.

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Advertising executives saw the irony of announcing the deal as a new report from WPP’s GroupM came out showing that the industry had rocketed to over $1tn in revenues — but also revealing that more than half of the value was now in the five large tech groups, who accounted for almost all of the growth.

The report underlined the need for consolidation in the traditional agency holding company model. Executives agree that the future will be about investing in AI and other technology that allows advertising to be done faster, cheaper and more effectively for clients. 

One area where scale will potentially make a difference is data and AI investment, with the combined group having increased firepower to invest resources in this area, according to analysts. 

Wren agreed it would mean more money to put into new technology, but he pointed to the tech already being deployed by the two groups. For example, Omnicom bought digital commerce business Flywheel from Ascential last year.

Publicis has fared better than its rivals having invested early in data-led services, including through the acquisitions of digital groups Sapient in 2015 and Epsilon in 2019 to bolster its technology platforms.

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Vollmer said that “this big-bang consolidation play is an attempt to catch up to Publicis who threatens to break away from its peers in terms of capabilities and performance”. 

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Daniel Penny acquitted in NYC subway chokehold case after jury finds him not guilty of criminally negligent homicide

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Daniel Penny acquitted in NYC subway chokehold case after jury finds him not guilty of criminally negligent homicide

Daniel Penny has been acquitted in the chokehold death of a homeless man aboard a New York City subway car last year.

The 26-year-old former Marine had been charged with second-degree manslaughter and criminally negligent homicide in connection with the May 2023 death of 30-year-old Jordan Neely.

A jury found Penny not guilty of criminally negligent homicide Monday — three days after a Manhattan judge dismissed manslaughter charge when the 12-member panel said it could not come to a unanimous decision on the first and more serious of the two charges. The second-degree manslaughter charge carried a maximum 15-year prison sentence; criminally negligent homicide carried a maximum sentence of four years. There was no minimum sentence for either charge.

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Judge Maxwell Wiley had ordered the jury to return Monday to consider the second, lesser charge of criminally negligent homicide. It deliberated for less than two hours before delivering its verdict.

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According to the Associated Press, Penny “briefly smiled” as the verdict was read while others inside the courtroom reacted with applause and anger. Some, including Neely’s father, were told to leave after audibly reacting, per AP.

How the incident unfolded

Jordan Neely is pictured before going to see the Michael Jackson movie “This Is It” in Times Square, New York, in 2009. (Andrew Savulich/New York Daily News/Tribune News Service via Getty Images)

Penny, an architecture student, was on his way to the gym when he encountered Neely on an uptown F train in Manhattan on the afternoon of May 1, 2023.

Witnesses say Neely, a former Michael Jackson impersonator, was acting erratically after boarding the train before Penny placed him in a chokehold. Some witnesses told police that Neely shouted at other passengers, threw his jacket on the ground, complained of being hungry and thirsty and threatened to hurt people on the train. Others did not report hearing those threats.

Video taken by a fellow passenger shows Penny on the ground restraining Neely with a chokehold while two other men are standing over them. Penny then lets go of Neely, who is seen lying motionless on the floor of the train.

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When police arrived, Neely was unresponsive and first responders were unable to revive him. He was then taken to a local hospital, where he was pronounced dead.

Footage of the chokehold was shared widely online and sparked protests around the city.

Penny later told police that he “just put [Neely] in a chokehold” and “put him out” to ensure he wouldn’t hurt anyone.

What happened during the trial

Assistant District Attorney Dafna Yoran delivers her closing argument at Manhattan Criminal Court as Daniel Penny looks on Tuesday in this courtroom sketch

Assistant District Attorney Dafna Yoran delivers her closing argument at Manhattan Criminal Court as Daniel Penny looks on Tuesday in this courtroom sketch. (Jane Rosenberg/Reuters)

Prosecutors with the Manhattan district attorney’s office argued that Penny’s chokehold — which lasted approximately six minutes — became reckless when he held on too long, beyond the point when Neely represented any kind of threat to fellow passengers.

Attorneys for Penny argued that he saw “a genuine threat and took action to protect the lives of others” and that he had restrained Neely with a “variation of a nonlethal chokehold” borrowed from martial arts training he had been taught as a Marine. In doing so, they suggested that Neely’s death could have been caused by something else.

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But Dr. Cynthia Harris, the medical examiner who performed the autopsy on Neely, testified that “there are no alternative reasonable explanations” for Neely’s death other than Penny’s chokehold.

Harris had ruled the cause of death was compression of the neck, or asphyxia.

Jurors were shown a video of an interview Penny gave to police in which he demonstrated the chokehold on Neely.

“He had his back turned to me and I got him in a hold, got him to the ground, and he’s still squirming around and going crazy,” Penny is heard saying in the video.

The defense also argued that Neely had prior arrests, a history of mental illness and drugs in his system at the time of his death.

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Reactions to the verdict

Penny arrives at the courthouse on Monday as demonstrators protesting Neely's death are seen across the street. (Alex Kent/Getty Images)

Penny arrives at the courthouse on Monday as demonstrators protesting Neely’s death are seen across the street. (Alex Kent/Getty Images)

The case stirred a national debate about mental illness, homelessness, public safety, the use of force and race. Neely was Black. Penny is white.

Outside the courthouse, Dante Mills, a lawyer for Neely’s family, criticized the jury.

“We’re devastated, upset, angry, hurt,” Mills said, flanked by Neely’s father, Andre Zachery. “Jordan Neely was choked to death by someone who didn’t care people was telling him to stop. Last week the jury was — they couldn’t decide on the top charge but they come back his week and they give up on us.”

“The district attorney did a good job,” Mills added. “The jury in this case let us down.”

Last week, Zachery filed a civil suit against Penny, accusing him of negligent contact, assault and battery in Neely’s death.

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“I miss my son,” Zachery said. “My son didn’t have to go through this. I didn’t have to go through this either.”

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Syria crisis latest: Turkey calls for international support for ‘inclusive administration’

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Syria crisis latest: Turkey calls for international support for ‘inclusive administration’

Turkey’s foreign minister has called on the UN and other international actors to “extend a hand to the Syrian people and support the formation of an inclusive administration” following the overthrow of Bashar al-Assad’s government.

Hakan Fidan said Turkey would work for the territorial integrity, political unity, welfare and security of Syria after opposition fighters, including rebels Ankara has supported since 2011, captured Damascus on Sunday.

Turkey will prevent Isis and the Kurdistan Workers’ party, a militant group with close ties to US-backed Syrian Kurds who control north-east Syria, from exploiting the situation, and will end Syria’s status as “safe haven for terrorism,” he said, adding that Ankara was already working on the return of refugees and Syria’s reconstruction.

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