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French government felled in no-confidence vote, deepening political crisis

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French lawmakers passed a no-confidence vote against the government on Wednesday, throwing the European Union's second-biggest economic power deeper into a crisis that threatens its capacity to legislate and tame a massive budget deficit.

Far-right and left-wing lawmakers joined forces to back a no-confidence motion against Prime Minister Michel Barnier, with a majority 331 votes in support of the motion, Reuters reported.

Barnier now has to tender his resignation and that of his government to President Emmanuel Macron, making his minority government's three-month tenure the shortest lived in France's Fifth Republic beginning in 1958. He is expected to do so on Thursday morning, French media reported.

The hard left and far right punished Barnier for using special constitutional powers to adopt part of an unpopular budget without a final vote in parliament, where it lacked majority support. The draft budget had sought 60 billion euros ($63.07 billion) in savings in a drive to shrink a gaping deficit.

"This (deficit) reality will not disappear by the magic of a motion of censure," Barnier told lawmakers ahead of the vote, adding the budget deficit would come back to haunt whichever government comes next.

No French government had lost a confidence vote since Georges Pompidou's in 1962. Macron ushered in the crisis by calling a snap election in June that delivered a polarised parliament.

With its president diminished, France now risks ending the year without a stable government or a 2025 budget, although the constitution allows special measures that would avert a U.S.-style government shutdown.

France's political turmoil will further weaken a European Union already reeling from the implosion of Germany's coalition government, and weeks before U.S. President-elect Donald Trump returns to the White House.

The country's outgoing defence minister Sebastien Lecornu warned the turmoil could impact French support for Ukraine.

The hard left France Unbowed (LFI) party demanded Macron's resignation.

Barnier's demise was cheered by far-right chief Marine Le Pen, who has sought for years to portray her National Rally party as a government in waiting.

"I'm not pushing for Macron's resignation," she said. "The pressure on the president will get greater and greater. Only he will make that decision."

NO EASY EXIT FROM FRENCH POLITICAL CRISIS

France now faces a period of deep political uncertainty that is already unnerving investors in French sovereign bonds and stocks. Earlier this week, France's borrowing costs briefly exceeded those of Greece, generally considered far more risky.

Macron must now make a choice. The Elysee Palace said the president would address the nation on Thursday evening.

Three sources told Reuters that Macron aimed to install a new prime minister swiftly, with one saying he wanted to name a premier before a ceremony to reopen the Notre-Dame Cathedral on Saturday, which Trump is due to attend.

Any new prime minister would face the same challenges as Barnier in getting bills, including the 2025 budget, adopted by a divided parliament. There can be no new parliamentary election before July.

Macron could alternatively ask Barnier and his ministers to stay on in a caretaker capacity while he takes time to identify a prime minister able to attract sufficient cross-party support to pass legislation.

A caretaker government could either propose emergency legislation to roll the tax-and-spend provisions in the 2024 budget into next year, or invoke special powers to pass the draft 2025 budget by decree - though jurists say this is a legal grey area and the political cost would be huge.

Macron's opponents also could vote down one prime minister after the next.

ECONOMIC PAIN

The upheaval is not without risk for Le Pen.

Macron allies sought to present her as an agent of chaos after her party joined forces with the left to down Barnier.

"The French will harshly judge the choice you are going to make," Laurent Wauquiez, a lawmaker from the conservative Les Republicains party who backs Macron, told Le Pen in parliament.

Since Macron called the summer snap election, France's CAC 40 benchmark stock market index has dropped nearly 10% and is the heaviest loser among top EU economies.

The euro EUR=EBS showed little immediate reaction versus the dollar, trading for around $1.05 per euro, but dipping against other European currencies, such as the Swiss franc and the pound .

"I’m amazed the euro hasn’t moved much," said Nick Rees, senior foreign exchange market analyst at Monex Europe. "There are two major powers in Europe, France and Germany, both of which right now are emasculated.”

Barnier's draft budget had sought to cut the fiscal deficit from a projected 6% of national output this year to 5% in 2025. Voting down his government would be catastrophic for state finances, he had said.

Le Pen shrugged off the warning. She said her party would support any eventual emergency law that rolls over the 2024 budget's tax-and-spend provisions into next year to ensure there is stopgap financing.

($1 = 0.9513 euro)

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Israeli strikes kill dozens in Gaza Strip as new ceasefire talks begin

Saturday’s deaths brought the toll to 70 since Friday, Palestinian health officials said.

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Israeli military strikes in the Gaza Strip have killed at least 70 people over the last day, Palestinian medics said on Saturday, as mediators launched a new ceasefire push to end the 15-month-old war, Reuters reported.

At least 17 of those who died were killed in airstrikes on two houses in Gaza City, the first of which destroyed the home of the Al-Ghoula family in the early hours, medics and residents said.

"At about 2 a.m. we were woken up by the sound of a huge explosion," said Ahmed Ayyan, a neighbour, adding that 14 or 15 people had been staying in the house.

"Most of them are women and children, they are all civilians, there is no one there who shot missiles, or is from the resistance," Ayyan told Reuters.

People scoured the rubble for any survivors trapped under the debris and medics said several children were among those killed. A few flames and trails of smoke still rose from burning furniture in the ruins hours after the attack.

There was no immediate comment from the Israeli military on the incident.

"Most of them are women and children, they are all civilians, there is no one there who shot missiles, or is from the resistance," Ayyan told Reuters.

People scoured the rubble for any survivors trapped under the debris and medics said several children were among those killed. A few flames and trails of smoke still rose from burning furniture in the ruins hours after the attack.

There was no immediate comment from the Israeli military on the incident.

At least six other Palestinians were killed in Israeli strikes in Jabalia in the north and near the central town of Deir Al-Balah, medics said.

Saturday's deaths brought the toll to 70 since Friday, Palestinian health officials said.

A renewed push is under way to reach a ceasefire in the war between Israel and Hamas and return Israeli hostages before U.S. President-elect Donald Trump takes office on Jan. 20, read the report.

Israeli mediators were dispatched to resume talks in Doha brokered by Qatari and Egyptian mediators, and U.S. President Joe Biden's administration, which is helping broker the talks, urged Hamas on Friday to agree to a deal.

Hamas said it was committed to reaching an agreement as soon as possible, but it was unclear how close the two sides were.

The armed group released a video on Saturday showing Israeli hostage Liri Albag - who local media said was a soldier - urging Israel to do more to secure the hostages' release. She said their lives were in danger because of Israel's military action in Gaza.

Albag's family said the video had "torn our hearts to pieces".

"This is not the daughter and sister we know. Her severe psychological distress is evident," a family statement said, calling on Israel's government and world leaders not to miss the opportunity to bring all remaining hostages back alive.

Prime Minister Benjamin Netanyahu said in response to the video that Israel continued to work tirelessly to bring the hostages home.

"Anyone who dares to harm our hostages will bear full responsibility for their actions," he said.

Israel launched its assault on Gaza in response to the Hamas attack on Oct. 7, 2023, in which militants stormed border communities from Gaza, killing about 1,200 people and seizing around 250 hostages, according to Israeli tallies, Reuters reported.

Its military campaign, with the stated goal of eradicating Hamas, has leveled swathes of the enclave, driving most people from their homes, and has killed 45,717 Palestinians, according to the Gaza health ministry.

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US plans $8 billion arms sale to Israel, US official says

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The administration of President Joe Biden has notified Congress of a proposed $8 billion arms sale to Israel, a U.S. official said on Friday, with Washington maintaining support for its ally whose war in Gaza has killed tens of thousands.

The deal would need approval from the House of Representatives and Senate committees and includes munitions for fighter jets and attack helicopters as well as artillery shells, Axios reported earlier. The package also includes small-diameter bombs and warheads, according to Axios, Reuters reported.

The State Department did not respond to a request for comment.

Protesters have for months demanded an arms embargo against Israel, but U.S. policy has largely remained unchanged. In August, the United States approved the sale of $20 billion in fighter jets and other military equipment to Israel.

The Biden administration says it is helping its ally defend against Iran-backed militant groups like Hamas in Gaza, Hezbollah in Lebanon and the Houthis in Yemen.

Facing international criticism, Washington has stood by Israel during its assault on Gaza that has displaced nearly all of Gaza's 2.3 million population, caused a hunger crisis and led to genocide accusations that Israel denies.

The Gaza health ministry puts the death toll at over 45,000 people, with many additional feared buried under rubble.

Diplomatic efforts have so far failed to end the 15-month-old Israeli war in Gaza that was triggered after an Oct. 7, 2023 attack by Palestinian Hamas militants that killed 1,200 and in which about 250 were taken hostage, according to Israeli tallies.

Washington, Israel's biggest ally and weapons supplier, has also previously vetoed U.N. Security Council resolutions on a ceasefire in Gaza.

Democrat Biden is due to leave office on Jan. 20, when Republican President-elect Donald Trump will succeed him. Both are strong backers of Israel.

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South Korean presidential guards prevent arrest of impeached Yoon after tense stand-off

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South Korea's presidential guards and military troops prevented authorities from arresting impeached President Yoon Suk Yeol on Friday in a tense six-hour stand-off inside Yoon's compound in the heart of Seoul.

Yoon is under criminal investigation for insurrection over his Dec. 3 martial law bid that stunned South Korea and led to the first arrest warrant to be issued for a sitting president.

"It was judged that it was virtually impossible to execute the arrest warrant due to the ongoing standoff," the Corruption Investigation Office for High-ranking Officials (CIO) said in a statement, Reuters reported.

CIO officials and police evaded hundreds of Yoon supporters who gathered in pre-dawn hours near his residence on Friday, vowing to block the arrest "with our lives".

Officials from the CIO, which is leading a joint team of investigators, arrived at the gates of the presidential compound shortly after 7 a.m. (2200 GMT Thursday) and entered on foot.

Once inside the compound, the CIO and police were outnumbered by cordons of Presidential Security Service (PSS) personnel, as well as troops seconded to presidential security, a CIO official told reporters.

More than 200 PSS agents and soldiers blocked the CIO officers and police, he added. While there were altercations and PSS agents appeared to be carrying firearms, no weapons were drawn, he said.

Yoon, who has been isolated since he was impeached and suspended from power on Dec. 14, was not seen during the standoff, he said.

South Korea's defence ministry said the troops were under the control of the PSS.

The CIO called off the effort to arrest Yoon around 1:30 p.m. due to concerns over the safety of its personnel, and said it "deeply regretted" Yoon's non-compliance.

The CIO said it would consider its next steps. The police, who are part of the joint investigation team, have designated the PSS chief and the deputy as suspects in a criminal case for obstruction of official duty and issued summons for them to appear for questioning on Saturday, Yonhap news reported.

Insurrection is one of the few criminal charges from which a South Korean president does not have immunity.

Yoon's arrest warrant, approved by a court on Tuesday after he ignored multiple summons to appear for questioning, is viable until Jan. 6.

In a statement after the arrest effort was suspended, Yoon's legal team said the CIO had no authority to investigate insurrection and it was regrettable that it had tried to execute an illegal warrant in a sensitive security area.

The statement warned police against supporting the arrest effort. The presidential office filed a criminal complaint against three broadcasters and YouTube channel owners for unauthorized filming of the presidential residence, which it said was "a secured facility directly linked to national security."

The current warrant gives investigators only 48 hours to hold Yoon after he is arrested. Investigators must then decide whether to request a detention warrant or release him.

Kim Seon-taek, a Korea University law professor, said targeting the PSS leadership may allow the investigators to sap the service's ability to put up resistance so they can try again to execute the warrant, which is "a rough way" to proceed.

A better way, he said, would be for acting President Choi Sang-mok to exercise his power to order the PSS to cooperate. Later on Friday, the CIO said it would ask Choi to give that order.

SURPRISE MARTIAL LAW

Yoon sent shockwaves through Asia's fourth-largest economy and one of the region's most vibrant democracies with his late-night announcement that he was imposing martial law to overcome political deadlock and root out "anti-state forces".

Within hours, however, 190 lawmakers had defied the cordons of troops and police to vote against Yoon's order. About six hours after his initial decree, Yoon rescinded it.

He later issued a defiant defence of his decision, saying domestic political opponents are sympathetic to North Korea and citing uncorroborated claims of election tampering.

Two South Korean military officials, including the martial law commander during the short-lived declaration, have been indicted on insurrection charges, Yonhap reported on Friday.

Kim Yong-hyun, who resigned as Yoon's defence minister after playing a major role in the martial law decree, has been detained and was indicted last week on charges of insurrection and abuse of power.

Separate from the criminal investigation, Yoon's impeachment case is before the Constitutional Court to decide whether to reinstate or permanently remove him. A second hearing in that case was held on Friday and the court set the first oral arguments for Jan. 14.

Bae Jin-han, one of the lawyers for Yoon, told reporters Yoon may not appear for the first arguments but will likely do so at a future hearing to argue his position.

North Korea's state media published a detailed report on the political turmoil in the South, including the arrest warrant issued for Yoon, who it said "stubbornly refuses to be investigated, totally denying his crimes with sheer lies."

North Korea has been harshly critical of Yoon, citing his hardline policy against Pyongyang as grounds in declaring the South a "primary foe" and announcing it had abandoned unification as a national goal.

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