French MPs back €20bn package to address the cost of living crisis
France's parliament has voted on a €20 billion package to respond to rising inflation and potential energy shortages this winter. Here's what the government is proposing.
After several days of debates, France's Assemblé Nationale has agreed on a the first bill in a package of measures to address the cost of living crisis - although the bills still need to pass through the Senate.
The so-called "emergency purchasing power bill" passed with 341 MPs in favour, 116 against and 21 abstentions in a vote that took place shortly before 6am on Friday after an all-night sessions in parliament. Debates now continue of the next phases of the package.
The Macron government's bill was backed by the centre-right Les Republicains and the far-right Rassemblement National party, while MPs from the far-left la France Insoumise denounced the bill as an 'attack on wages.'
The bill, whose proposed budget is €20 billion, is intended to respond to rising inflation, as well as the energy crisis that may spell shortages this winter due to the ongoing war in Ukraine.
Energy crisis and possible shortages - The bill provides various means for addressing the risk of energy shortages this winter. One of the most controversial measures authorises the state to re-open a coal-fired power station in eastern France in the event of power shortages this winter.
President Emmanuel Macron had promised to close all coal-fired power plants in France by 2022, and a member of Macron's party, Maud Bregeon, told AFP that "the return of coal is not good news," but defended the plans as a "temporary" response to "an exceptional situation."
It also includes plans for accelerating the supply of liquified natural gas, which, according to French daily Le Parisien, means the country "could see an influx of American shale gas."
This too has already received pushback. Environmentalist and Nupes member responded, telling Franceinfo "France has banned hydraulic fracturing as well as the research and extraction of shale gas on its soil. We can not be complicit in the exploitation of the dirtiest fossil fuels internationally."
Tripling the 'Macron bonus' - The tax-free bonus companies can choose to pay out to their employees will be tripled to €6,000. The left coalition disagreed with this addition to the text, having instead called for wage increases and a higher minimum wage.
Increases in pensions and benefits - Parliament voted to increase retirement pensions by four percent, along with several other benefits aimed at helping low-income families, which will be retroactively paid from July 1st. Other benefits impacted include family allowances and some social programmes such as the RSA (a work welfare benefit), the solidarity allowance for the elderly, or scholarships for students.
Cap on rent increases in France - This bill will provide a 'rent shield' - which is 3.5 percent cap on rent increases throughout the country. Given inflation levels, Finance Ministe Bruno Le Maire judged that rent increases could have risen by five to six percent without the cap.
'Deconjugating' disability benefits - Earlier in the week, the Assembly voted almost unanimously to separate disability benefits from marital status, meaning the at the allowance given to disabled adults will not take into account their spouse's income.
Facilitating cancelling online subscriptions - The 'cancellation' button will be made more accessible to consumers. Any company offering online subscriptions will have to provide easy and direct ways to cancel subscriptions. This will go into effect at the beginning of 2023.
Using frying oil as fuel - The bill also allows and endorses the possible usage of frying oil as fuel for vehicles. Food oils would need to be 'decanted and filtered,' and after which they can be mixed with conventional fuel. This type of fuel - already in use to power vehicles in several other European countries - also 'emits less pollution and greenhouse gases," according to Green Party representative Julien Bayou.
What comes next?
However, the debates are not over yet. Although the cost-of-living bill passed, it is only the first in a series of plans to address inflation and the energy crisis - and the more controversial aspects are yet to come.
Later on Friday afternoon, parliament will resume debates for the "projet de loi de Finances rectificative" (the Amending finances bill) which includes the abolition of the audiovisual tax (TV licence) and the fuel subsidy.
The current fuel subsidy takes €0.18 off at the pump and is set to be gradually decreased before the end of the year. However opposition parties want to increase it to €0.30 cents - something the government says is a 'red line', and that the budget for fuel must not exceed 4.4 billion. Parliament will also consider the 'worker's fuel allowance,' which was set to be a one-time benefit for low-income workers, as well as the 'transport bonus' that employers can offer their employees.
The Assembly will also debate whether or not to maintain the current 'energy shield' which caps gas and electric price price hikes to four percent. This is currently set to remain in place until the end of the year (2022).
The representatives will also debate potentially taxing the profits of large companies who benefited from the post-Covid recovery period.
Parliament will consider plans for the 'food voucher' intended to assist low-income families.The current plan for the programme would impact up to eight million households in France, offering a benefit of 100 per household and an additional 50 per child.
The Assembly will consider a broader tax exemption for overtime work (RTT).
Once all the bills are agreed in the Assemblée nationale they must go before the Senate, which has the power to make further amendments which must be discussed again in the lower parliament.
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After several days of debates, France's Assemblé Nationale has agreed on a the first bill in a package of measures to address the cost of living crisis - although the bills still need to pass through the Senate.
The so-called "emergency purchasing power bill" passed with 341 MPs in favour, 116 against and 21 abstentions in a vote that took place shortly before 6am on Friday after an all-night sessions in parliament. Debates now continue of the next phases of the package.
The Macron government's bill was backed by the centre-right Les Republicains and the far-right Rassemblement National party, while MPs from the far-left la France Insoumise denounced the bill as an 'attack on wages.'
The bill, whose proposed budget is €20 billion, is intended to respond to rising inflation, as well as the energy crisis that may spell shortages this winter due to the ongoing war in Ukraine.
Energy crisis and possible shortages - The bill provides various means for addressing the risk of energy shortages this winter. One of the most controversial measures authorises the state to re-open a coal-fired power station in eastern France in the event of power shortages this winter.
President Emmanuel Macron had promised to close all coal-fired power plants in France by 2022, and a member of Macron's party, Maud Bregeon, told AFP that "the return of coal is not good news," but defended the plans as a "temporary" response to "an exceptional situation."
It also includes plans for accelerating the supply of liquified natural gas, which, according to French daily Le Parisien, means the country "could see an influx of American shale gas."
This too has already received pushback. Environmentalist and Nupes member responded, telling Franceinfo "France has banned hydraulic fracturing as well as the research and extraction of shale gas on its soil. We can not be complicit in the exploitation of the dirtiest fossil fuels internationally."
Tripling the 'Macron bonus' - The tax-free bonus companies can choose to pay out to their employees will be tripled to €6,000. The left coalition disagreed with this addition to the text, having instead called for wage increases and a higher minimum wage.
Increases in pensions and benefits - Parliament voted to increase retirement pensions by four percent, along with several other benefits aimed at helping low-income families, which will be retroactively paid from July 1st. Other benefits impacted include family allowances and some social programmes such as the RSA (a work welfare benefit), the solidarity allowance for the elderly, or scholarships for students.
Cap on rent increases in France - This bill will provide a 'rent shield' - which is 3.5 percent cap on rent increases throughout the country. Given inflation levels, Finance Ministe Bruno Le Maire judged that rent increases could have risen by five to six percent without the cap.
'Deconjugating' disability benefits - Earlier in the week, the Assembly voted almost unanimously to separate disability benefits from marital status, meaning the at the allowance given to disabled adults will not take into account their spouse's income.
Facilitating cancelling online subscriptions - The 'cancellation' button will be made more accessible to consumers. Any company offering online subscriptions will have to provide easy and direct ways to cancel subscriptions. This will go into effect at the beginning of 2023.
Using frying oil as fuel - The bill also allows and endorses the possible usage of frying oil as fuel for vehicles. Food oils would need to be 'decanted and filtered,' and after which they can be mixed with conventional fuel. This type of fuel - already in use to power vehicles in several other European countries - also 'emits less pollution and greenhouse gases," according to Green Party representative Julien Bayou.
What comes next?
However, the debates are not over yet. Although the cost-of-living bill passed, it is only the first in a series of plans to address inflation and the energy crisis - and the more controversial aspects are yet to come.
Later on Friday afternoon, parliament will resume debates for the "projet de loi de Finances rectificative" (the Amending finances bill) which includes the abolition of the audiovisual tax (TV licence) and the fuel subsidy.
The current fuel subsidy takes €0.18 off at the pump and is set to be gradually decreased before the end of the year. However opposition parties want to increase it to €0.30 cents - something the government says is a 'red line', and that the budget for fuel must not exceed 4.4 billion. Parliament will also consider the 'worker's fuel allowance,' which was set to be a one-time benefit for low-income workers, as well as the 'transport bonus' that employers can offer their employees.
The Assembly will also debate whether or not to maintain the current 'energy shield' which caps gas and electric price price hikes to four percent. This is currently set to remain in place until the end of the year (2022).
The representatives will also debate potentially taxing the profits of large companies who benefited from the post-Covid recovery period.
Parliament will consider plans for the 'food voucher' intended to assist low-income families.The current plan for the programme would impact up to eight million households in France, offering a benefit of 100 per household and an additional 50 per child.
The Assembly will consider a broader tax exemption for overtime work (RTT).
Once all the bills are agreed in the Assemblée nationale they must go before the Senate, which has the power to make further amendments which must be discussed again in the lower parliament.
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