Parliament votes massively in favour of cost-cutting reforms

French Prime Minister Edouard Philippe delivers a speech on the government general policies plans at the National Assembly in Paris, France, July 4, 2017.
French Prime Minister Edouard Philippe delivers a speech on the government general policies plans at the National Assembly in Paris, France, July 4, 2017. REUTERS/Philippe Wojazer

French President Emmanuel Macron's government sailed through a vote of confidence on Tuesday, with 370 MPs in the 577-seat National Assembly voting in favour, to 67 against and 129 abstaining.


The vote was held after Prime Minister Edouard Philippe unveiled the government's cost-cutting, pro-business agenda to the assembly, where Macron's party has a comfortable majority.

Philippe put spurring entrepreneurship at the heart of his first policy speech to the National Assembly after presidential and parliamentary elections in May and June.

"Businesses must want to set up and develop on our territory rather than elsewhere," Philippe told lawmakers, announcing that corporate tax would be cut from 33 percent to 25 percent in the next five years.

Tackling France's chronic overspending was a priority, he said, warning that the public debt now totalled 2.1 trillion euros, nearly the equivalent of an entire year's economic output.

"We are dancing on a volcano that is rumbling ever louder," Philippe told the newly elected National Assembly, saying that public spending would be cut and the public deficit would be brought below 3.0 of GDP this year.

"France cannot remain the champion both of public spending and taxes," he said.

Almost all of the measures confirmed election promises from 39-year-old centrist President Emmanuel Macron who was elected France's youngest ever president in May after promising to modernise the country.

Election pledges

Philippe has already outlined one of the government's biggest economic reforms: an overhaul of France's rigid labour law which will enable companies to negotiate working terms and conditions with their employees.

The measure faces resistance from leftist opponents.

The powerful CGT trade union has already called for street protests and strikes in September.

The government will face little difficulty in passing legislation in the lower house of parliament where candidates from Macron's new Republic on the Move (REM) party won more than 300 out of 577 seats in last month's election.

The upper-house Senate, where rightwing Republicans hold a majority, will be trickier.

Philippe said Tuesday that the government would also honour other campaign pledges including introducing a new national service for young people and making dental and eye care free on the health system.

Other measures including raising the price of cigarettes progressively to 10 euros from their current level of 7 euros to fight smoking-related diseases, the biggest cause of preventable deaths in France.

Macron reviews

Macron, France's youngest president at just 39, gave a state of the union address to both houses of parliament on Monday, a novelty which he intends to turn into an annual event to present his vision for the country.

He said he was not aiming for mere reforms but a "transformation" of the political system and the economy.

He faced mixed reviews for his inaugural address.

The French press noted his determination to restore the prestige of the office of the all-powerful presidency and said he appeared keen to stay above the political fray.

"Macron is leaving the difficult work to Philippe," wrote commentator Paul-Henri du Limbert in the right-leaning Le Figaro newspaper.

But Macron's style -- he has used the former royal palace in Versailles twice since taking office and has given only one media interview -- has also seen him criticised by some for being aloof, monarchical or even "pharaonic".

On Tuesday, he visited a military base in the northwest of the country, where he embarked for a four-hour trip on the nuclear submarine "The Terrible."

Macron also promised in his speech on Monday to slash by a third the number of MPs in the lower and upper houses, telling lawmakers he would call a referendum if they do not agree to the measure.

The new head of state has broadly positive approval ratings with slightly more than half of respondents in recent polls expressing a positive view of him -- around the same level as Hollande enjoyed at the start of his term.

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