French National Assembly approves bill to boost purchasing power

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Issued on: 22/07/2022 – 07:55

The French government took a step forward on a key re-election promise to boost household purchasing power amid soaring inflation as the National Assembly passed a bill on Friday lifting pensions and temporarily freezing rent hikes. 


In a first test of President Emmanuel Macron‘s ability to reach compromises across party lines after losing the absolute majority in recent elections, the bill next goes to the Senate, the upper house dominated by the conservative Les Republicains.

The draft law also includes a pay rise for public sector workers, food checks and a mechanism for companies to make higher tax-free bonus payments to employees. The expected budget cost is about 20 billion euros ($20.37 billion).

The so-called “emergency purchasing power bill” passed with 341 MPs in favour, 116 against and 21 abstentions in a vote that took place shortly before 6:00 am (0400 GMT). 

“Building majorities for projects to provide real solutions to the French people: we succeeded,” Prime Minister Elisabeth Borne wrote on Twitter.

Helping the French cope with a higher cost of living, mainly driven by soaring energy prices after Russia’s invasion of Ukraine, was one of Macron’s key promises after his first term saw street protests that drew fame as the yellow-vest movement.

Last month, France saw inflation of 6.5% on the year, in line with other euro zone countries.

The legislation includes a range of measures designed to help consumers, such as extending fuel tax cuts, raising pensions and benefits, and capping rent increases.  

It also gives the government powers to tackle a looming energy crisis caused by the fallout of the Ukraine crisis. 

‘Atmosphere like a football match’ 

The late-night vote followed heated debates in which politicians of the left-wing Nupes alliance, the largest opposition bloc, criticised the government for measures they said did not go far enough.

One of the most controversial measures authorises the state to re-open a coal-fired power station in eastern France in the event of power shortages this winter.  

“The return of coal is not good news,” admitted Maud Bregeon from Macron’s ruling party, defending it as a “temporary” response to “an exceptional situation.”  

French politics has been cast into an unusual period of instability following parliamentary elections last month that saw recently re-elected Macron lose his majority.  

The government suffered its first defeat on July 12 when opposition parties voted down a proposal to give the government powers to demand travellers show proof of vaccination against Covid-19.  

The first fortnight of debates has been frequently bad-tempered, with one ruling MP suggesting the assembly had “an atmosphere like a football match”.  

Although the cost-of-living bill passed with a wide majority, analysts say other pieces of planned legislation, such as pension reform, will be far more difficult to pass. 

Separately, debates for a finance bill will start on Friday afternoon that might include fuel discounts that could cost the government billions. 

“If some people think that in order to relieve our compatriots, it is preferable to increase the discount from September onwards, which will be added to the discount that is given in total, I am open to this proposal,” Finance Minister Bruno Le Maire said on Friday. 

(FRANCE 24 with AFP and REUTERS)