The French government lifts the lid on a jar of proposals to increase purchasing power

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The French government led by Elisabeth Borne will present a series of measures on Thursday aimed at boosting purchasing power. Without an absolute majority in parliament, and with the opposition already in arms, the government risks being criticized, whatever it proposes.

The government will introduce two bills.

The first is an amending finance bill intended to adapt to unforeseen changes in the economic environment since the vote on the annual budget in September 2021.

The second is described, quite simply, as a spending power act.

The total cost of the proposals, if adopted, will be around 25 billion euros.

Among the main measures will be a 4% increase in pensions and other social assistance.

Civil servants will benefit from a salary increase of 3.5%. The poorest families will benefit from food vouchers worth 100 euros, with an additional 50 euros for each child.

The subsidy of 18 cents per liter of petrol must remain in place and energy prices must be capped by the government.

Bread and butter policy

Borne has already specified its priorities: purchasing power, purchasing power and purchasing power.

The government statistician, the National Institute of Statistics and Economic Research, INSEE, says that the French will indeed see their purchasing power reduced this year by 1%.

But inflation will probably reach 5.5%, a level that was not reached during the dark days of 1985. People will therefore feel much poorer.

Economy Minister Bruno Le Maire said it was urgent “to provide concrete answers to real questions and, as quickly as possible, to help people in difficulty”.

While no one on the opposition benches will block this exercise in government generosity, at least not openly, the debate over the details of the proposals promises to be vigorous.

And the Upper House Senate, which can request changes to proposed laws, is dominated by right-wing forces.

Borne says she is ready to listen to the demands and suggestions of the political opposition. “We will make changes to ensure a convergence of opinion.” Which might be easier said than done.

The opposition ready for battle

Right-wing Republicans and the far-right National Rally want a gas tax cut. Too expensive, says the government.

The left wants the Smic to be raised to 1,500 euros from 1,343 euros. Bad for the job, according to the government.

The Nupes coalition of Greens and Socialists says the proposals are “very, very far from meeting the hopes of French voters”. Their parliamentary group has promised a string of amendments.

Jean-Luc Mélenchon’s Les Frères insoumis say that the French do not want to live on government donations. They want decent base salaries.

The Communist Party’s Fabien Roussel has called for street protests this fall if the government does not recover.

When the political dust settles, the issue of funding proposals will still be relevant.

The government spending deficit is expected to be around 5% this year, with economic growth expected at 2.5%.