President Nicolas Sarkozy’s conservatives have lost their majority in the Senate to the opposition Socialists.
The ruling party’s defeat comes only seven months before the presidential election.
Conservatives had controlled the upper chamber since Charles de Gaulle founded the Fifth Republic in 1958.
Senatorial elections are held every three years, when half of the body’s members are appointed for six-year terms by electoral colleges of representatives from departments in metropolitan France and overseas.
The system usually benefits the right, which is more popular in the countryside.
The new Socialist majority will not be able to derail Sarkozy’s agenda as the Senate can’t block legislation.
The loss of a longstanding bastion for the conservatives is a symbolic setback, however, especially when the president’s approval ratings are so dismal.
Sarkozy’s failure to revitalize the French economy has left voters depressed about their economic prospects. Unemployment is high and the European debt crisis has invited scrutiny of France’s public finances.
The International Monetary Fund has warned that France will probably miss its deficit targets unless it implements deeper spending cuts.
The government unveiled a series of austerity measures last month that were almost entirely composed of tax increases.
The increase in revenue should help close France’s fiscal gap, but it is unlikely to spur job growth.
Worse, it may add to the regulatory uncertainly that is already rampant in France where the state accounts for more than half of the national economy and continues to dominate entire industries, including electricity, postal services and railways.
The private labor market is burdened with rigid regulations that exacerbate unemployment and undermine France’s competitiveness within the eurozone.
The Socialists blame austerity for France’s lackluster economic growth, but their presidential contenders have offered few specific policy alternatives.
The frontrunners, former party boss François Hollande and his successor Martine Aubry, both argue for fiscal consolidation and higher spending on education and welfare at the same time.