France's Macron names centrist ally Bayrou as PM

President Emmanuel Macron on Friday named centrist Francois Bayrou as prime minister, handing him the daunting task of hauling France out of months of political crisis.

The 73-year-old head of the MoDem group, which is allied to Macron's party, was appointed nine days after parliament ousted Michel Barnier's government in a historic no-confidence vote following a standoff over an austerity budget.

"The president of the Republic has appointed Mr. Francois Bayrou as prime minister and tasked him with forming a government," the presidency said.

The announcement capped hours of drama that saw Bayrou summoned to a morning meeting at the Elysee palace -- where he was reportedly told Macron would choose another figure -- only for the presidency to finally announce he had the post.

Bayrou is the sixth prime minister of Macron's mandate, with his predecessor Barnier France's shortest-serving premier, having lasted only three months. He is also Macron's fourth prime minister of 2024.

The newly appointed premier faces the immediate challenge of forming a cabinet that can survive a no-confidence vote in a divided parliament and thrashing out a 2025 budget in a bid to limit economic turmoil.

At the traditional handover ceremony with Barnier, Bayrou declared: "No one knows better than me the difficulty of the situation," with France facing a ballooning budget deficit coupled with political instability.

"I am fully aware of the Himalayas that loom ahead of us," he said of the budget deficit that is now 6.1 per cent of GDP.

He also vowed to fight what he described as the "glass wall that has risen up between citizens and the authorities".

Handing over, Barnier told his successor: "Our country is in an unprecedented and grave situation."

Several sources told AFP that the morning meeting between Macron and Bayrou had been a stormy affair, with the president initially leaning towards naming his loyal Defence Minister Sebastien Lecornu as premier.

Losing his temper, Bayrou threatened to break the alliance with Macron, who decided it would be best to plump for Bayrou in the name of unity, the sources said.

"Sebastien Lecornu should have been the one named," said a source close to the talks. But Macron "did not have the choice".

Mujtaba Rahman, Europe director at risk analysis firm Eurasia Group, commented: "In the long history of the Fifth Republic (founded in 1958), this may have been the first time that a prime minister chose himself."

The political instability prompted Moody's to downgrade France's credit rating Saturday to Aa3, with a stable outlook.

"France's public finances will be substantially weakened by the country's political fragmentation," the ratings agency said.

Bayrou will be tasked with holding dialogue with all political forces except the far-right National Rally (RN) and hard-left France Unbowed (LFI) parties "to find conditions for stability and action", a member of Macron's team said on Friday.

"Francois Bayrou's name emerged in recent days as the most consensual" choice, said the source, asking not to be named.

Macron was first expected to name a new prime minister in an address to the nation last week.

In a sign of the stalemate, Macron did not name Barnier's successor then and also missed a 48-hour deadline he had given at a meeting of party leaders on Tuesday.

The president has been confronted with a complex political equation since snap parliamentary elections in July: how to secure a government against a no-confidence vote in a bitterly divided lower house where no party or alliance has a majority.

Far-right leader Marine Le Pen, who teamed with the left to topple the Barnier government, said her RN party would not automatically do likewise to Bayrou but did not rule out exploiting such a "lever".

"I'm not threatening no-confidence motions morning, noon and night. I'm just saying that I'm not giving up on this tool," she said.

The LFI said it would table such a motion.

Socialists quickly posed conditions for not supporting a no-confidence motion in an open letter to Bayrou.

He must agree not to ram laws through without a parliamentary vote and not to rely on support from the far right, the party's board said, adding that they would not accept ministerial posts.