February 4, 2023

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The French government took a step forward on a major reelection pledge to boost household purchasing power amid rising inflation when the National Assembly on Friday passed a bill to lift pensions and temporarily freeze rent increases.

In a first test of President Emmanuel Macron’s ability to compromise across party lines after losing an absolute majority in recent elections, the bill then goes to the Senate, the upper house dominated by conservative Les Republicains.

The bill also includes a pay rise for public sector workers, food controls and a mechanism for companies to make higher tax-free bonus payments to employees. The expected budget cost is about 20 billion euros ($20.37 billion).

Helping the French cope with the higher cost of living, mainly driven by rising energy prices after Russia’s invasion of Ukraine, was one of Macron’s key promises after his first term with street protests that came to fame as the yellow vest movement.

Last month, France saw an annual inflation rate of 6.5%, in line with other eurozone countries.

The overnight vote followed heated debates in which politicians from the left-wing Nupes alliance, the largest opposition bloc, criticized the government for measures they felt did not go far enough.

With 341 votes in favor, with 116 against, the government was supported by Les Republicains and the far-right Rassemblement National, while Nupes lawmakers voted not in favor of it.


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