French lawmakers approve multi-year deficit reduction plan

Sixty-seven lawmakers abstained from voting, including 41 Socialists, a high rate pointing to resistance ahead as Valls tries to push through reform to revive the economy and spur growth

French lawmakers approve multi-year deficit reduction plan

World Bulletin/News Desk

French lawmakers voted on Tuesday for a 50 billion euro ($69 billion) savings plan meant to let the euro zone's second-largest economy meet deficit-reduction targets, but a high abstention rate betrayed dissent within the Socialist majority.

The 2015-2017 plan passed by 265 votes to 232 in the National Assembly, the lower house of parliament. The programme can now be submitted for approval to the European Commission, which has already granted France two extra years to bring its deficit below EU-mandated limits.

"It's a decisive vote that deeply emphasizes the advancement of our country," Prime Minister Manuel Valls told parliament before the vote.

Sixty-seven lawmakers abstained from voting, including 41 Socialists, a high rate pointing to resistance ahead as Valls tries to push through reform to revive the economy and spur growth while also meeting deficit-cutting goals.

While the Greens party and the left-wing Front de Gauche voted in the majority against the plan, the centrist UDI party mostly abstained. A few members of the opposition UMP party, which overwhelmingly voted against the plan, also abstained.

Besides clamping down on public spending, the savings plan freezes pensions and welfare benefits for a year and keeps most civil service pay frozen until 2017.

But economists are sceptical as to whether the plan will allow the Socialist government to meet its goal of lowering its public deficit to 3 percent of output by the end of 2015, and there is internal Socialist opposition to any austerity drive.

Voters have sent the approval ratings of President Francois Hollande to record lows given France's sluggish economic growth and rising joblessness that he has been unable to stem.

On Monday, Valls ceded to pressure from rebellious rank and file lawmakers within his majority to exempt low-income pensioners from the welfare spending freeze.

Valls, who took office last month in a government shakeup, proposed to exclude benefits for the poor and pensioners earning less than 1,200 euros per month from the one-year freeze, and announced other concessions.

His compromises point to the difficulty of selling the painful savings measures to the electorate, which has indicated it will push back against attempts to whittle away at France's cherished welfare system. One union has already vowed a one-day strike next month to protest at the civil servant wage freeze.

Last Mod: 29 Nisan 2014, 22:28
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