The decision is a boost for President Francois Hollande as it avoids a divisive battle within his Socialist party and with its left-wing allies over a constitutional amendment which would have likely delayed ratification for months and adding to the worries of already-anxious investors.
Following the vote Hollande "asked the government to rapidly prepare a law for the ratification" of the pact, his office said in a statement.
The fiscal pact sets strict limits on governments running deficits — the so-called golden rule — and is aimed at tackling the debt crisis that has
engulfed the eurozone and threatened the global economy.
Signed in March, the pact must be approved by 12 of 17 eurozone members, and France is hoping to follow Italy, Germany and others by ratifying the
accord in September, ahead of it taking effect at the start of next year.
The pact requires countries with high debt to keep their structural deficits below 0.5 percent of gross domestic product or face stiff penalties.
The Constitutional Council has previously required amendments to the constitution to take account of European treaties, but it ruled that France
had already made similar commitments to limit its budget deficit under the Maastricht and Lisbon treaties.
The pact urges countries to enshrine the deficit limits in their constitutions, but Holland prefers to use instead a so-called fundamental law which has constitutional force but only needs a simple majority to be adopted.
A constitutional amendment would require three-fifths approval by parliament or a referendum which would have likely delayed ratification for
Former budget minister Valerie Pecresse lashed out at the Socialists for wasting a year as they had opposed adopting similar budget limits last year.
"Francois Holland and the Socialist Party made France and Europe lose a year in the building of a real economic union by the opposition to the golden
rule in the parliamentary debate last summer and repeated procrastination…" said the lawmaker from the conservative UMP party that held power until
earlier this year.
Many on the French left are against imposing EU-mandated austerity in the constitution and some, even among Hollande's Socialists, have said they would
vote against the move.
"There are very many of us who do not want to approve" an amendment, Socialist Senator Marie-Noelle Lienemann told France Info radio Thursday,
denouncing the move as the equivalent of "austerity for life".
Jean-Vincent Place, the head of the lawmakers' group for the Greens — key Socialist allies in parliament — also said he would vote against, calling the
pact an example of "extreme austerity and excessive stringency."
Hollande, whose Socialists and their allies hold a simple majority in parliament, should however be able to rely on the support of right-wing and
centrist lawmakers in order to ratify the pact.
Hollande defeated right-winger Nicolas Sarkozy for the presidency in May, vowing to shift French economic policy away from austerity and toward growth
with a tax-and-spend programme.
He promised during the campaign to renegotiate the fiscal pact but later accepted the addition of a so-called "growth pact" that will see the European
Union mobilising 120 billion euros ($148 billion) for projects aimed at boosting economic activity.
Hollande is struggling to stem rising joblessness in France amid warnings the country is likely to enter a recession in the third quarter.