French MPs on Tuesday (November 12, 2024) rejected a draft government budget that had been massively amended with new taxes by the opposition, as the heavily indebted country is under pressure to balance the books.
With the cobbled-together revenue bill’s swingeing tax increases failing to pass the National Assembly, Prime Minister Michel Barnier’s minority government now has a largely free hand in submitting a cleaned-up text to the Senate upper house, before the two chambers come together to seek a compromise.
“A majority of MPs rejects both fiscal battering and the impossibility of France living up to its European commitments,” budget minister Laurent Saint-Martin said after the 362-192 vote against the text.
The lower house is divided into three similarly-sized blocs: the NFP left alliance, centrists and conservatives supporting the government, and the far-right National Rally (RN).
Over the weeks of debate, lawmakers transformed Barnier’s original 60-billion-euro ($64 billion) plan to right the public finances, made up of 40 billion in spending cuts and 20 billion in new tax receipts.
Appointed by French President Emmanuel Macron, Mr. Barnier is looking to restore confidence as global rating agencies eye downgrades to France’s creditworthiness.
Downgrades could increase the interest burden from France’s massive debt pile still higher than its present 50 billion euros annually — the second-largest line item in government spending behind education.
Rejecting spending cuts, scores of new taxes were added by the left alliance of hard-left France Unbowed (LFI), Socialists, Greens and Communists.
On Tuesday, “Macronists and the far right have rejected the budget for greater social and environmental justice that the NFP managed to build,” LFI leader Mathilde Panot wrote on X.
Receipts under the left’s amendments would have totalled 75 billion euros, according to Eric Coquerel, a LFI lawmaker who heads the lower house’s Finance Committee.
But Charles de Courson, a centrist charged with shepherding the budget law through parliament, estimated the new revenues would likely total 12 billion once measures “incompatible with European Union membership, or that are unconstitutional” were eliminated.
Lawmakers had approved measures including ending France’s contribution to the EU Budget, a change initiated by the anti-Brussels RN.
Published – November 13, 2024 09:53 am IST
