Purchasing power: the government unveils its measures, Parliament in ambush

Purchasing power: the government unveils its measures, Parliament in ambush

Faced with inflation, the government lifts the veil on Thursday on a series of long-awaited measures intended to protect the purchasing power of the French, and which will be seen as a passing exam for its relative majority in the Assembly in the face of opposition to the offensive.

After already more than 25 billion euros put on the table since autumn 2021 to mitigate in particular the rise in energy prices, the government will present in two texts (a draft amending budget and a purchasing power law ) a new burst of aid for a roughly equivalent amount.

Among the main measures are the early revaluations of 4% of retirement pensions and social benefits, the 3.5% increase in the salary of public officials, a food check of 100 euros, to which 50 euros will have to be added per child, the extension of the fuel discount from 15 to 18 cents and the tariff shield on energy, the abolition of the fee or even the tripling of the Macron bonus.

Prime Minister Elisabeth Borne in front of the National Assembly, July 6, 2022 (AFP – Bertrand GUAY)

“The urgency of purchasing power” is the “first challenge” for the government and Parliament, defended Prime Minister Elisabeth Borne on Wednesday in her general policy speech to the National Assembly.

According to INSEE, the purchasing power of the French should indeed decline by 1% this year, weighed down by inflation which would reach 5.5% on average over the year, unheard of since 1985.

After the “whatever the cost” of the health crisis, the executive has thus not finished with the expenses, the Minister of the Economy ensuring that he wants to “provide the most concrete possible answers, the most immediate possible , the most effective possible to the difficulties of purchasing power of the French”.

If the need for such expenditure is rather shared, the adoption of these texts promises to be eventful with an Assembly where the presidential camp has only a relative majority and a Senate dominated by the right.

The purchasing power of the French under Emmanuel Macron's first five-year term (AFP - Sylvie HUSSON)
The purchasing power of the French under Emmanuel Macron’s first five-year term (AFP – Sylvie HUSSON)

At the end of the Council of Ministers, the hearing of Bruno Le Maire and the Minister Delegate for Public Accounts Gabriel Attal by the Finance Committee of the Assembly, now chaired by the Insoumis Eric Coquerel, will be a baptism of fire.

“These measures are our basis for work. With my government, we will listen to you and we will amend them when convergences emerge”, promised Elisabeth Borne on Wednesday.

– “Far from being up to par” –

In recent days, the government has launched leads. Bruno Le Maire said he was open to extending the fuel discount of 18 cents per liter until the end of the year (instead of the end of August) and proposed creating a new compensation for motorists who use their car to work.

On the other hand, at this stage, no proposal put forward by the opposition seems to be viewed favorably by the executive.

Inflation in <a href=France (AFP – Sylvie HUSSON)” style=”float:right”/>
Inflation in France (AFP – Sylvie HUSSON)

Lower fuel taxes to bring prices down to 1.50 euro/l, as the LRs want, or freeze prices at 1.40 euro/l, as the left wants? Too expensive, according to Bercy. Smic at 1,500 euros? A threat to employment, we answer to the government.

“There are undoubtedly intermediate paths” to be found, we want to believe in the entourage of the Prime Minister, Elisabeth Borne having notably underlined in her speech on Wednesday to foresee possible “compromises, convergences” with the LRs.

The leader of the RN deputies Marine Le Pen said her camp’s desire to “influence” the texts that will be presented, “in the forefront of which the one that the French await with hope and impatience, that on the power of purchase”.

At Nupes, we judge the text of the government “very, very far from being up to what the French expect”, according to the president of the Insoumis group in the assembly Mathilde Panot, and we plan to file many amendments to the purchasing power bill.

They will still have to be financed, we warn the government, where we recall the “constrained” framework of public finances, with a public deficit still forecast at 5% this year and weaker than expected growth of 2 .5%.

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