Analysis-France's new government is fragile but don't write it off just yet

By Elizabeth Pineau and Michel Rose

PARIS (Reuters) - It's a mess, but it might just hold.

Despite looking like the most unstable French administration in recent history, despised by the left and propped up by the far-right, Prime Minister Michel Barnier's fragile minority government may last longer than many think, lawmakers and analysts told Reuters.

That's because Marine Le Pen's National Rally party, which could join forces with other disgruntled parties to topple the government at will, has no real interest in owning an even bigger mess that might damage its presidential hopes in 2027. It also faces an awkward corruption trial due to begin in Paris next week.

Meanwhile, Barnier has sought to placate Le Pen and neutralise the far-right's power over his right-wing team by appointing ministers who share RN anger on immigration and crime, leaving Le Pen's party with less to grumble about.

The left - still irked that it won the most seats in this summer's legislative election, only to see its prime ministerial candidate overlooked for the top job - says it will issue no-confidence motions against the government but knows it doesn't have the numbers on its own for those threats to count. 

Say it softly but, after months of turmoil since Macron called the snap vote, a fragile stability now prevails.

"The French don't like chaos," senior RN lawmaker and party spokesman Laurent Jacobelli told Reuters. "We are not here to cause chaos, we are pragmatic."

Pouria Amirshahi, a Green party lawmaker who was part of the leftist alliance that won the most seats in this summer's vote, said the stability of the new government was based on "a sort of resignation" on the left, and the fact that "the RN has no interest in bringing down the government right away".

"They want to calmly prepare to govern," he said. The upcoming graft trial "will prevent Marine Le Pen from accelerating the upheaval that she is calling for but which she does not really want", he added.

On Monday, Le Pen, her party and 26 other RN members will go on trial in a Paris criminal court on charges of embezzling European Parliament funds. 

Le Pen and the RN have denied any wrongdoing. If they are found guilty, they could face 10 years in prison and a 1 million euro fine, while also face being barred from office for up to five years. The trial is due to last seven weeks.

Jacobelli was calm about the impact the trial could have on perceptions of the RN, but confident the party would prevail.

"Obviously, this will be discussed at a time when we would prefer to talk about the problems and the future of the French," he told Reuters.

EARLY TEST

The upcoming 2025 budget bill, which needs to reach lawmakers by mid-October at the latest, provides the first real test of Barnier's government. 

It's politically toxic. New Finance Minister Antoine Armand and Budget Minister Laurent Saint-Martin must find billions of euros in spending cuts and tax increases to close a bigger-than-expected deficit.

Although discussions will be tough, especially as France is under pressure from the EU and bond markets, the RN has little reason to shut down France by blocking the bill, experts said.

"They're looking for respectability so, for them, playing a partner role in the making of the budget is very clearly part of their electoral strategy," said Christopher Dembik, an economist with Swiss bank Pictet, who believes the government will survive until summer at least. 

"Barnier has perfectly understood that to last, whether he likes it or not, he needs the RN." 

That reliance was made abundantly clear this week. 

After Armand incurred Le Pen's wrath by suggesting publicly he would exclude the RN from budget talks, Barnier was forced to call her to reassure her that RN would be involved, and Armand was strong-armed into inviting them, sources said. 

On Wednesday, right-wing interior minister Bruno Retailleau said he would look into toughening immigration laws after the far-right pounced on the death of a 19-year-old girl allegedly murdered by a Moroccan man in the country illegally.

This new orthodoxy is causing unease among centrist lawmakers, who are now part of Barnier's government but have been told not to upset their arch-enemy.

"That the prime minister calls Le Pen to tell her 'I'm sorry if my economy minister has offended you,' that's shocking to me," said Erwan Balanant, a member of the pro-European centrist MoDem party. 

Macron, relegated to a weakened role after the election debacle though confident that Barnier and his team won't kill his legislative legacy, now holds little sway over the daily flow of French political life. 

That leaves the government's new, unlikely bedfellows to muddle through alone. 

"I don't know how long (the government) will last," Balanant continued, "but we need to move forward, to prepare a budget, so we have to work." 

(Reporting by Elizabeth Pineau and Michel Rose; Additional reporting by Juliette Jabkhiro; Editing by Gabriel Stargardter and Hugh Lawson)