Macron’s inflation-fighting bill faces narrow compromise in parliament

  • Macron’s party lost majority control in June
  • Requires at least 39 more votes to pass lower inflation
  • The opposition wants concessions, but the far right can cooperate

PARIS, July 13 (Reuters) – The French government of President Emmanuel Macron, seeking votes to pass a cost-of-living bill after losing its majority in parliament, is open to amendments backed by conservative opponents that would induce labor, a government source said.

The €20 billion “purchasing power bill” is the first major test of the government’s ability to pass laws since it lost control of the National Assembly in elections last month.

Passing the legislation, which includes a 4% pay rise for civil servants and a 3.5% increase in pension and welfare benefits, without costly concessions to opposition parties will require delicate political calculation.

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To that end, he is prepared to encourage the implementation of measures championed by conservative Les Républicains that would benefit workers, such as tax relief on overtime pay or making it easier to work in retirement, the source said.

“Anything that goes in the direction of better remunerating work is worth examining. On this basis, we should be able to build a compromise, in particular with Les Républicains”, added the government source, who spoke under covered with anonymity.

The “Together!” Macron’s centrist (Together!) alliance holds 250 of the 577 seats in the lower house, meaning it must find at least 39 more votes to pass the bill.

The government does not expect the cost of the package to the budget to weigh on the public deficit due to better than expected tax revenues so far this year.

Finance Minister Bruno Le Maire opposes amendments that would push the deficit beyond the 5% of GDP expected this year, jeopardizing plans to bring it back in line with a limit of 3% of GDP. European Union by 2027.

The government source said while there might be some room for additional spending, it was in the millions of euros, not billions.

OPPONENTS PLAY HARDBALL

However, opposition parties want to flex their newfound muscle by adding amendments that could cost public finances billions.

The broad left-wing Nupes alliance tabled 600 amendments worth 100 billion euros, according to Macron’s party.

Lawmaker Eric Coquerel, whose far-left La France Insoumise (France Insoumise) party is the dominant group within Nupes, said the government would fail to pass his bill without making concessions.

“The days when they could pass a law with the snap of a finger are over,” Coquerel, who heads the finance committee and has considerable power over which amendments to consider, told Reuters.

The Republicans (LR), with its 61 lawmakers, intend to demonstrate that they can win big concessions beyond making work pay. He refused to back down on a demand to cap fuel prices at the pump – currently above €2 a liter for diesel – at €1.50 through tax cuts, despite the huge cost to finances public.

“If the government wants us to be part of the majority, then it’s on our terms,” ​​party leader Olivier Marleix said.

While other LR lawmakers indicate they could be more flexible, the government may need to find votes from independent lawmakers and perhaps also from moderates within the Nupes bloc.

And if the Macron government is reluctant to rely on the far-right National Rally, it could end up relying on at least some of its 89 lawmakers.

“Even if the measures do not go far enough and are not perfect, if they provide support to millions of French people, we will support them,” RN MP Julien Odoul told Reuters.

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Reporting by Elizabeth Pineau and additional reporting by Leigh Thomas; Written by Leigh Thomas; Editing by Richard Lough and Catherine Evans

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