Pay Bills

French lawmakers back Macron’s promised inflation relief

  • French government wins cross-party support
  • Measures to protect the French against the rising cost of living
  • Macron follows through on election campaign promises

PARIS, July 22 (Reuters) – French President Emmanuel Macron’s government on Friday honored a re-election pledge aimed at boosting household purchasing power amid soaring inflation, as the National Assembly passed a bill lifting pensions and temporarily freezing rent increases.

With the vote in the lower house, Macron passed a first test of his ability to find compromises between parties after losing his absolute majority in the June legislative elections.

“We managed to obtain a majority on a case-by-case basis to provide the French with concrete solutions,” said Prime Minister Elisabeth Borne.

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The package, which is expected to cost 20 billion euros ($20.4 billion), was a major part of Macron’s re-election campaign in April. His party lost its majority in parliamentary elections as far-right and far-left parties pushed for more radical and costly solutions to the inflation crisis.

This means the Macron government must now negotiate on a case-by-case basis with opposition parties to pass legislation, setting the stage for bitter battles over its planned overhaul of the pension and unemployment insurance systems.

The anti-inflation bill also includes a pay rise for public sector workers, food vouchers and a mechanism for companies to pay higher tax-free bonuses to employees.

FUNDING

Separately, debates on a 2022 Supplementary Finance Bill funding the new measures were due to begin on Friday afternoon, including state-funded car fuel rebates.

While opposition Republican MPs are pushing for bigger and longer rebates, the government has signaled it is open to compromise as long as the cost is kept at 4.4 billion euros.

With some lawmakers calling for a “supertax” on companies benefiting from the energy price crisis, French oil company TotalEnergies said it would cut fuel prices at its filling stations across France. Read more

Helping the French cope with a higher cost of living, mainly due to soaring energy prices after Russia invaded Ukraine, was one of Macron’s main promises after his first term was marked by violent protests and the movement of yellow vests.

The government has already spent around 25 billion euros on measures such as capping electricity and gas prices, helping to keep French inflation lower than most other eurozone countries. Last month, France experienced inflation of 6.5% over 12 months.

The late-night vote followed heated debates in which politicians from the left-wing Nupes Alliance, the largest opposition bloc, demanded sweeping pay rises and criticized the government for measures that , in their view, did not go far enough.

Obtaining 341 votes for the bill, with 116 against, the government was supported by Les Républicains and the far-right National Rally, while the Nupes deputies did not vote in favour.

The bill then goes to the Senate, the upper house dominated by conservative Republicans, although the lower house can later veto changes to it.

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Reporting by Elizabeth Pineau, additional reporting by Myriam Rivet and Leigh Thomas; Written by Tassilo Hummel and Leigh Thomas; Editing by Clarence Fernandez, Christopher Cushing and Andrew Cawthorne

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