Purchasing power: What the 20-billion-euro plan adopted by the French Assemblée contains
The French #TheFrench
French Finance Minister Bruno Le Maire speaks at the rostrum of the Assemblée Nationale, Monday, July 18, 2022, during the debates on the purchasing power bill. JULIEN MUGUET POUR « LE MONDE »
While the parliamentary battle is far from over, MPs took one step forward by adopting the first draft of the purchasing power bill, close to 5 am on Friday, July 22. The Sénat must now examine the bill in its Finance Committee, starting on Monday.
The Assemblée Nationale must now move on to the bill amending the 2022 budget which provides the financing for fighting inflation. MPs have planned to work for part of the weekend, at least until late Saturday evening, because debates have been stormy since Monday. Here is an overview of the main measures already adopted in the first part of the “purchasing power package.”
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The bill provides for tripling the ceiling of the “Macron bonus,” an optional tax-free bonus introduced during 2018 Yellow Vests protest for people earning up to three times the minimum wage. Employers will therefore be able to pay an exceptional bonus of up to 3,000 euros (or 6,000 euros, in the case of a profit-sharing agreement), until December 31, 2023
The measure is criticized by part of the left, which, during the debates, called for directly increasing wages, through an increase of the minimum wage. According to the government’s impact assessment, more than 15 million people benefited from this bonus between 2019 and 2022, with an average amount of 542 euros.
Increasing welfare benefits and pensions
The increase of basic retirement and disability pensions by 4 % was adopted by MPs after an initial automatic revaluation of 1.1 % in January. Family allowances and minimum welfare benefits are upgraded at the same level. The measure will take effect retroactively from July 1, 2022, without waiting for the automatic annual revaluation.
Expanding disabled adults’ allowance
In a rare moment of concord in the Assemblée, MPs voted to separate the disabled adults’ allowance from marital status. The aid will no longer be calculated according to the number of tax units in a household, which until now meant that 270,000 people in couples – out of the 1.2 million who receive the aid– were dependent on their spouse’s income. This measure should come into effect in October 2023.
The measure had been put to a vote six times by the opposition during Emmanuel Macron’s first term in office, but it had been systematically rejected by the majority, who considered it unfair because it benefited both the poor and the wealthy. This time, the majority voted along with the opposition.
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MPs adopted a “rent shield” with a cap on changes in rent from the index level at 3.5% between July 2022 to June 2023, in order to limit the impact of high inflation on rent increases and to make the expenses that households spend on their housing predictable. In addition, housing aid will be revalued in advance, rather than on October 1, as provided by current law. Its increase of 3.5% represents an additional expense of 168 million euros for the state budget.
The Assemblée Nationale voted for a reinforced “rent shield” for overseas territories, in order to limit rent increases there to a maximum of 2.5%. In addition, opposition MPs managed to pass another amendment creating the possibility of limiting the rent increases in rural zones to 1.5%.
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MPs unanimously adopted the facilitation of online termination procedures for subscriptions taken out by consumers. Against the advice of the government, an amendment carried by La France Insoumise expanded the possibility of electronically terminating an online contract, and an amendment carried Les Républicains allowed for people recognized as over-indebted to be exempted from paying compensation when terminating a telephone or internet subscription.
The procedures for canceling insurance contracts online were also simplified. Criminal sanctions incurred in the event of a misleading or abusive commercial practice were also been strengthened, despite skepticism from the left and part of the right regarding the introduction of this judicial provision in a text on purchasing power.
French ‘energy sovereignty’
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The bill on purchasing power includes several measures to try to address the fear of a Russian gas cut-off through the increased use of fossil fuels. It provides a legal framework to restart the coal-fired power plant in Saint-Avold next winter, though it was closed in March. It allows caps on greenhouse gas emissions to be raised in the event of a “threat to the security to the electricity supply” and on the condition that the emissions are offset. Exemptions and administrative simplifications were also adopted to accelerate the commissioning of a floating LNG terminal in the port of Le Havre, in September 2023, in order to diversify gas supply sources.
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Translation of an original article published in French on lemonde.fr; the publisher may only be liable for the French version.