How Macron's inflation relief law tests France's new political order
Skip to main content
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
  • Epaper
  • More
    • Subscribe
    • COVID-19
    • Bangladesh
    • Splash
    • Videos
    • Games
    • Long Read
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
The Business Standard

Tuesday
August 16, 2022

Sign In
Subscribe
  • Home
  • Economy
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
  • Epaper
  • More
    • Subscribe
    • COVID-19
    • Bangladesh
    • Splash
    • Videos
    • Games
    • Long Read
    • Infograph
    • Interviews
    • Offbeat
    • Thoughts
    • Podcast
    • Quiz
    • Tech
    • Archive
    • Trial By Trivia
    • Magazine
    • Supplement
  • বাংলা
TUESDAY, AUGUST 16, 2022
How Macron's inflation relief law tests France's new political order

Europe

Reuters
04 July, 2022, 05:20 pm
Last modified: 04 July, 2022, 05:23 pm

Related News

  • France says all its troops battling Islamists in Mali have now left
  • Firefighters battle blazes in southeast France
  • Drought in England, fires rage in France as heatwave persists
  • France battles 'monster' wildfire near Bordeaux for third day
  • Wildfires rage in southwestern France amid new heatwave

How Macron's inflation relief law tests France's new political order

Reuters
04 July, 2022, 05:20 pm
Last modified: 04 July, 2022, 05:23 pm
French President Emmanuel Macron, candidate for his re-election, reacts on stage after partial results in the first round of the 2022 French presidential election, in Paris, France, April 10, 2022. REUTERS/Benoit Tess
French President Emmanuel Macron, candidate for his re-election, reacts on stage after partial results in the first round of the 2022 French presidential election, in Paris, France, April 10, 2022. REUTERS/Benoit Tess

France President Emmanuel Macron's government will get its first taste of life under France's new political order in the days ahead when it tables a bill to help households cope with runaway inflation without a controlling majority in parliament.

Macron's party lost its absolute majority in parliamentary elections last month as voters handed big gains to the far-right Rassemblement National and the left-wing Nupes alliance.

 

Why does the purchasing power bill matter?

With households increasingly struggling in the face of record inflation, the government is under pressure to pass the bill quickly while opposition parties are impatient to wield their new power to substantially rewrite proposed legislation.

Rival parties from the left and the right are already demanding amendments that would strain the fragile public finances unless the government and Macron's party can convince them to back down.

The tricky political horse-trading in the coming days will be a harbinger of what awaits Macron's government for the next five years in parliament.

With memories still fresh of the large-scale "yellow vest" street protests and violence in 2018, the government is eager to avoid adding a political crisis to a cost-of-living crisis.

What does the bill mean for the public finances?

The package is likely to cost more than 25 billion euros ($26 billion), according to finance ministry sources, on top of existing measures already worth 26 billion euros.

 

Its main inflation-relief measures include a 4% increase to welfare and pension benefits, raising civil servant pay by 3.5% and prolonging a state-financed rebate on fuel prices at the pump.

Despite the extra spending, Finance Minister Bruno Le Maire says he can keep the budget deficit to 5% of GDP thanks to stronger-than-expected tax revenues so far this year.

However, he has warned the opposition that the post-Covid public finances are in the "danger zone" and there is no room for costly measures on top of those proposed by the government.

So far, opposition parties are not heeding his warnings. The far-right Rassemblement National (National Rally) is seeking a huge cut in value added sales tax on car fuel. The conservative Les Republicains party, whose support Macron is most likely to count on to pass laws, is also demanding a huge cut in fuel tax.

Meanwhile, the Nupes coalition, whose biggest constituent is the radical left La France Insoumise (France Unbowed) party, is demanding that the minimum wage be hiked to 1,500 euros net from 1,300 currently. It also wants civil servants salaries increased 10% and tied in the future to inflation.

What does the bill mean for future legislation?

As the first major bill to come before parliament since the elections, it will set the tone for other legislation and reveal how obstructive opposition parties are willing to be to secure concessions.

After the summer, the next big test will be the annual budget bill due at the end of September which is not usually passed into law until the end of December.

Lawmakers elected Eric Coquerel of La France Insoumise last week to head the lower house's finance committee, which plays the key role of tweaking the bill and revising or weeding out amendments before the full house votes.

As president of the commission, he will have considerable power to decide which amendments get voted on and which do not.

France Unbowed tried in 2019 to block a pension reform by adding more than 20,000 amendments to the bill to bog down its passage through parliament.

Macron eventually abandoned the reform due to the Covid-19 crisis, but aims to resurrect it during his second term.

If a budget law is not adopted after 70 days, the government can bypass the parliament and implement it by decree, averting a U.S. style-government shutdown.

($1 = 0.9583 euros)

World+Biz

France / France inflation / French President Emmanuel Macron

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • A diesel fuel tank at a supplier in the US.Photographer: Luke Sharrett/Bloomberg
    A storm brews in heating oil
  • Rohingya repatriation to be under UN supervision: Michelle Bachelet
    Rohingya repatriation to be under UN supervision: Michelle Bachelet
  • Bilkis Bano, one of the survivors of the Gujarat riot victims.(AP Photo)
    Eleven convicts in Gujarat gang rape, murder cases freed in India

MOST VIEWED

  • A view shows smoke rising above the area following an alleged explosion in the village of Mayskoye in the Dzhankoi district, Crimea, August 16, 2022. REUTERS/Stringer
    Blasts at Russian base in Crimea show possible Ukrainian fightback
  • Workers walk to work during the morning rush hour in the financial district of Canary Wharf in London, Britain, January 26, 2017. REUTERS/Eddie Keogh/File Photo
    UK labour market shows more sign of cooling
  • About 42% of Europe’s gas came from Russia through the Nord Stream pipeline. It transports about 55 billion cubic meters of gas per year. Photo: Reuters
    Why Europe faces climbing energy bills
  • People look out to the City of London financial district from a viewing platform in London, Britain, October 22, 2021.  Photo :Reuters
    Why has polio been found in London, New York and Jerusalem, and how dangerous is it?
  • FILE PHOTO: Keir Starmer speaks during a Labour Party general election campaign meeting in Harlow, Britain November 5, 2019. REUTERS/Hannah McKay
    Britain’s opposition Labour Party demand energy price cap freeze
  • Border Patrol agents bring migrants into Dover harbour on a boat, after they tried to cross the channel, in Dover, Britain, September 7, 2020. REUTERS/Matthew Childs/File Photo
    UK pushes ahead with Rwanda migrant scheme as small boats keep coming

Related News

  • France says all its troops battling Islamists in Mali have now left
  • Firefighters battle blazes in southeast France
  • Drought in England, fires rage in France as heatwave persists
  • France battles 'monster' wildfire near Bordeaux for third day
  • Wildfires rage in southwestern France amid new heatwave

Features

Photo: Collected

Welcome to the age of glass facades

8h | Habitat
Photo: Mumit M/TBS

Why artificial oyster reefs are the answer to our coastal embankments problems

8h | Panorama
Illustration: TBS

Anwar Group: From comb maker to owner of 20 companies

10h | Panorama
TBS Sketch

Bangabandhu and the spirit of Liberation War were killed in 1975

1d | Supplement

More Videos from TBS

Whose negligence caused loss of life in under construction projects?

Whose negligence caused loss of life in under construction projects?

7m | Videos
Shakib Al Hasan wins despite 'losing'

Shakib Al Hasan wins despite 'losing'

32m | Videos
Is there a possibility to reduce the cost of living?

Is there a possibility to reduce the cost of living?

32m | Videos
Cumilla agro entrepreneur gains success in growing tea in Lalmai hills

Cumilla agro entrepreneur gains success in growing tea in Lalmai hills

3h | Videos

Most Read

1
Dollar crisis: BB orders removal of 6 banks’ treasury chiefs 
Banking

Dollar crisis: BB orders removal of 6 banks’ treasury chiefs 

2
From left Afzal Karim, Murshedul Kabir and Mohammad Jahangir
Banking

Sonali, Agrani and Rupali banks get new MDs

3
Photo: TBS
Bangladesh

5 crushed to death as BRT girder falls on car in Uttara

4
Dollar price drops by Tk8 in kerb market
Economy

Dollar price drops by Tk8 in kerb market

5
Representational Image. Photo: Collected
Bangladesh

Air passengers should plan extra commute time to airport: DMP

6
Photo: Collected
Transport

Will Tokyo’s traffic model solve Dhaka’s gridlocks?

EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2022
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net