Macron’s Revised Budget to Fight Inflation Gets House Approval

(Bloomberg) -- France’s National Assembly backed President Emmanuel Macron’s plan to fund an anti-inflation aid package for households and the nationalization of Electricite de France SA.

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The revised budget, which includes funds needed to complete the nationalization of energy utility EDF, was approved early Wednesday by the Parliament’s Lower House. The bill will face a similar vote in the Senate in coming days.

The government says the planned nationalization of EDF, which is already 84%-state owned, will streamline decision-making and reinforce France’s energy independence at a time of supply uncertainty.

The relatively quick adoption of the budget update shows that Macron is able to govern with the support of lawmakers outside his parliamentary group, despite losing his outright majority in June.

Other Measures

The Lower House also agreed to scrap a TV license fee and fund public media such as France 24 TV channel or France Inter radio with revenues from value added tax. Lawmakers rejected a new tax on so-called “superprofits” from large companies like TotalEnergies SE and shipper CMA CGM SA.

The government is betting on the amended budget to finance measures to combat surging inflation that have already been approved by the National Assembly. The new 20 billion euros ($20.3 billion) bill, includes an increase in pensions, a tax bonus for workers and higher public sector wages. It also lifts administrative and ecological hurdles to revamp fossil energy infrastructure.

Both the amended budget and the anti-inflation bill are expected to ultimately be approved. Still, other challenges await the government in parliament after the summer break when it plans to present a 2023 budget and overhauls of labor laws and the pension system.

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