French lawmakers approve $20.3 bn to help households amid rising prices

French lawmakers on Wednesday approved a 20 billion-euro (USD 20.3-billion) package of measures to help struggling households cope with rising energy and food prices.

The 395-to-112 vote came after a heated debate at the National Assembly, where French President Emmanuel Macron no longer has a majority. The Senate is expected to vote the text later Wednesday.

The bill was a key promise from Macron, who was reelected for a second term in April. It was also a crucial test of the government's ability to govern and opposition forces' ability to weigh in on the lawmaking process.

Macron's centrist alliance won the most seats at the National Assembly in June but lost its absolute majority as a leftist coalition and the far right both made big gains, becoming strong opposition forces.

Annual inflation has reached a record 8.6 per cent for the 19 countries using the shared euro currency, swollen by a huge increase in food and energy costs fuelled partly by the war in Ukraine. In France, annual inflation is estimated to be running at 6.5 per cent.

Your purchasing power is our priority, French government spokesperson Olivier Veran tweeted.

To protect you from inflation, we maintained the price cap on gas and electricity and set a price cap to limit rent increases to 3.5 per cent.

The bill also includes increasing pensions and some welfare payments by 4 per cent. On fuel, a current state-financed rebate of 18 cents per liter will be increased to 30 cents in September and October. Private companies are also being encouraged to offer employees an annual tax-free bonus of up to 6,000 euros (USD 6,080).

The text was backed by members of Macron's centrist alliance, the conservative The Republicans party and the far-right National Rally. It has been debated at parliament alongside an updated version of the budget law, which is to be voted on later this week.

The leftist Nupes coalition the largest opposition force, composed of the far-left, Communists, Socialists and the Greens criticized the measures as not going far enough and widely voted against the bill on Wednesday.

Aurlie Trouv, from the far-left France Unbowed party, said nothing is up to the inflation's level... The project is actually putting into law the decline of the purchasing power.

Heated discussions at the National Assembly led the debate to be extended to evenings and weekends, with lawmakers from Macron's alliance sometimes needing to sprint into the chamber to stop opposition amendments from passing.

We are living one of the most serious energy crisis, which represents about 60 per cent of the current inflation, Minister for Energy Transition Agns Pannier-Runacher said.

She said the bill provides measures to boost France's energy production and supplies, including possibly requisitioning gas-powered electricity plants if gas supplies were threatened.

Another measure plans to install a floating terminal in the western port of Le Havre to be able to import more liquified natural gas, which comes by ship from places like the US and Qatar.

Recent weeks of debates at the National Assembly contrasted with previous years, when Macron used to have a wide majority allowing him to almost automatically pass measures.

The parliamentary session is ending this week for both houses of parliament, the National Assembly and the Senate. French lawmakers will start debating again in October.