France in limbo after Macron gamble deepens political deadlock

Emmanuel Macron refused his prime minister's resignation on Monday, as the president scrambled to maintain France's credibility after his snap election gamble failed to break political deadlock.

The left-wing New Popular Front (NFP) won most seats in Sunday's second-round parliamentary vote, defying polls to beat both Macron's centrists and Marine Le Pen's far-right National Rally (RN).

But no group wields an outright majority and no obvious candidate for prime minister has emerged.

Many in France were relieved by the outcome, with cheering crowds gathering in Paris to celebrate.

But potentially divisive talks on forming a new government were just beginning, three weeks before Paris hosts the Olympics.

Prime Minister Gabriel Attal submitted his resignation to Macron but was asked to remain in power in a caretaker capacity to see out the Games — and reassure the international community and the markets that France still has a government.

Macron's office said he had thanked Attal for leading the centrist alliance in European and legislative elections and asked him to stay "for the time being in order to ensure the stability of the country".

In a sign of concern about the financial impact of a political crisis in the European Union's second-largest economy, business leaders' group Medef urged any new government to offer "clear and stable economic policy".

Ratings agency S&P meanwhile warned that France's credit score would be "under pressure" if Paris does not "reduce its sizeable public deficit", less than two months after its latest downgrade.

  'No illusion' 

The Paris stock exchange opened 0.49 percent down, rebounded and then closed in negative territory as France digested the...