The French government collapsed on Wednesday as parliament voted to oust Prime Minister Michel Barnier and his cabinet, throwing the nation into the worst political and fiscal turmoil in decades. Why it matters: The chaos leaves Europe's second largest economy without a functioning government for the first time in 60 years — the most severe fallout to date from the efforts to shrink its deficit.

Whichever government comes in next will face enormous pressure to reduce the government’s deficit, which has greatly increased since the pandemic. The country also faces other economic challenges, including falling consumer confidence and slower growth.

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.

It marks the first time the country's government has collapsed in a no-confidence vote since 1962. His overthrowing will further France's current political instability, after snap elections in summer led to no single group having a majority in parliament.