French parliament adopts 20 bln euro inflation relief package

With the final vote in the lower house, Macron passed a test of his ability to strike cross-party compromises after losing his absolute majority in June legislative elections. With households struggling in the face of spiralling inflation, the government had been under pressure to pass the 20 billion euro ($20.37 billion) package quickly.

France's parliament on Wednesday approved a bill that will lift pensions and allow companies to make higher tax-free bonus payments to employees after President Emmanuel Macron promised to boost household purchasing power amid soaring inflation. With the final vote in the lower house, Macron passed a test of his ability to strike cross-party compromises after losing his absolute majority in June legislative elections.

With households struggling in the face of spiralling inflation, the government had been under pressure to pass the 20 billion euro ($20.37 billion) package quickly. The surging cost of living pushed voters to the far right and hard left in this year's elections. "This text responds to the urgency of the situation and the needs of the people," said Christine Le Nabour, a lawmaker from Macron's Renaissance party.

The assembly voted 395-112 in favour of the legislation. The legislation was a major plank of Macron's campaign for re-election in April. It has been debated -- often through long, raucous nights -- alongside a supplementary budget bill which will go to a vote for final approval later this week.

The legislation increases pensions and some welfare payments by 4% and sets a cap on rent increases at 3.5%. Civil servants will receive a 3.5% pay bump. A state-financed rebate of 18 cents per litre on fuel will be increased to 30 cents in September and October.

Meanwhile, companies will be able to offer employees annual tax-free bonuses of 6,000 euros, up from 1,000 euros previously. The inflation-relief bill was approved after the National Assembly - where Macron's ruling minority found support from conservative and far-right lawmakers - and the conservative-dominated Senate reach agreement on the text.

Left-wing lawmakers from the Nupes coalition said the measures were inadequate to help poor families deal with rising food and energy prices. "You accepted amendments that mean the poor work more to earn less and less," said Sandrine Rousseau, a green party lawmaker and member of the Nupes bloc.

($1 = 0.9820 euros)

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