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POLITICS

French PM to unveil first laws as part of Macron’s mission to transform France

French Prime Minister Edouard Philippe will unveil Tuesday the new government's first steps towards the "transformation" of the country promised by President Emmanuel Macron.

French PM to unveil first laws as part of Macron's mission to transform France
Photo: AFP

Macron and his new centrist party Republic on the Move (REM) swept to power in elections in May and June on promises to rejuvenate French politics, boost entrepreneurship and overhaul the social security system.

Philippe will set out the measures the government intends to put to parliament over the next 12 months, including controversial labour market reforms, tax cuts for businesses and a law to improve ethical standards in public life.

Macron, France's youngest president at just 39, gave a state of the union address to both houses of parliament on Monday, saying that he was not aiming for mere reforms but a “transformation” of the political system and the economy.

As well as reducing France's budget deficit to under 3.0 percent of GDP, he has promised an overhaul of unemployment benefits and pension systems and to reduce the number of civil servants by 120,000 over his five-year term.

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France is ready for 'radically new path', says Macron as he vows to slash French lawmakers by a third

The government will face little difficulty in passing legislation in the lower house of parliament where REM candidates won more than 300 out of 577 seats in last month's election, only 14 months after the creation of the party.

The upper-house Senate, where rightwing Republicans hold a majority, will be trickier.

Macron faced mixed reviews for his inaugural address to lawmakers in the Palace of Versailles, a novelty which he intends to turn into an annual event to present his vision for the country.

The French press noted his determination to restore the prestige of the office of the all-powerful presidency and said he appeared keen to stay above the political fray.

“Macron is leaving the difficult work to Philippe,” wrote commentator Paul-Henri du Limbert in the right-leaning Le Figaro newspaper.

Many critics say Macron's unpopular Socialist predecessor as leader, his former mentor Francois Hollande, failed to project an image of presidential authority.

But Macron's style — he has used the former royal palace in Versailles twice since taking office and has given only one media interview — has also seen him criticised by some for being aloof, monarchical or even “pharaonic”.

On Tuesday, he was visiting a military base in the northwest of the country where he is expected to be taken on a trip aboard the nuclear submarine “The Terrible.”

Macron also promised in his speech on Monday to slash by a third the number of MPs in the lower and upper houses, telling lawmakers he would call a referendum if they do not agree to the measure.

The new head of state has broadly positive approval ratings with slightly more than half of respondents in recent polls expressing a positive view of him — around the same level as Hollande enjoyed at the start of his term.

POLITICS

Income tax, property grants and cigarettes: What’s in France’s 2023 budget?

France's finance minister has unveiled the government's financial plans for the next year, and says that his overall aim is to 'protect' households in France from inflation and rises in the cost of living - here's what he announced.

Income tax, property grants and cigarettes: What's in France's 2023 budget?

The 2023 Budget was formally presented to the Council of Ministers on Monday, before economy minister Bruno Le Maire announced the main details to the press. 

The budget must now be debated in parliament, and more details on certain packages will be revealed in the coming days, but here is the overview;

Inflation – two of the biggest measures to protect households from the rising cost of living had already been announced – gas and electricity prices will remain capped in 2023, albeit at the higher rate of 15 percent, while low-income households will get a €100-200 grant. The energy price cap is expected to cost the government €45 billion in 2023.

EXPLAINED: What your French energy bills will look like in 2023

Property renovations – the MaPrimeRenov scheme, which gives grants to householders for works that make their homes more energy-efficient, will be extended again into 2023, with a budget of €2.5 billion to distribute.

Income tax – the income tax scale will be indexed to inflation in 2023, so that workers who get a pay increase to cope with the rising cost of living don’t find themselves paying more income tax. “Disposable income after tax will remain the same for all households even if their salary increases,” reads the 2023 Budget.

Pay rises –  pay will increase for teachers, judges and other civil servants as inflation is forecast to reach 4.3 percent next year after 5.4 percent in 2022. Around €140 million is assigned to increase the salaries of non-teaching staff in schools. 

New jobs – nearly 11,000 more public employees will be hired, in a stark reversal of President Emmanuel Macron’s 2017 campaign promise to slash 120,000 public-sector jobs – 2,000 of these jobs will be in teaching. 

Small business help – firms with fewer than 10 employees and a turnover of less than €2 million will also benefit from the 15 percent price cap on energy bills in 2023. The finance ministry will put in place a simplified process for small businesses to claim this aid. In total €3 billion is available to help small businesses that are suffering because of rising costs. 

Refugees – In the context of the war in Ukraine, the government plans to finance 5,900 accommodation places for refugees and asylum seekers in various reception and emergency accommodation centres. The budget provides for a 6 percent increase in the “immigration, asylum and integration” budget.

Cigarettes – prime minister Elisabeth Borne had already announced that the price of cigarettes will rise “in line with inflation”.

Ministries – Le Maire also announced the budget allocation for the various ministries. The Labour ministry is the big winner with an increase of 42.8 percent compared to last year, coupled with the goal to reach full employment by 2027. Education gets an increase of €60.2 billion (or 6.5 percent more than in 2022), much of which will go on increasing teachers’ salaries, while the justice and environment ministries will also see increased budgets.

Conversely, there was a fall in spending for the finance ministry itself.

Borrowing –  the government will borrow a record €270 billion next year in order to finance the budget. “This is not a restrictive budget, nor an easy one – it’s a responsible and protective budget at a time of great uncertainties,” said Le Maire. 

The government is tabling on growth of one percent, a forecast Le Maire defended as “credible and pro-active” despite an estimate of just 0.5 percent GDP growth by the Bank of France, and 0.6 percent from economists at the OECD.

The public deficit is expected to reach five percent of GDP, as the EU has suspended the rules limiting deficit spending to three percent of GDP because of Russia’s war against Ukraine.

Parliament

The budget plans now need to be debated in parliament where they are likely to face fierce opposition. Emmanuel Macron’s centrist LREM party and its allies lost their majority in elections earlier this year.

Macron also plans to push ahead with a pension reform that would gradually start pushing up the official retirement age from 62 currently, setting up a standoff with unions and left-wing opposition parties.

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