French government considers forcing through budget bill after tax on rich vote

Paris: France’s minority right wing government suffered a major blow when left wing and centrist deputies united to make a temporary tax on the rich into a permanent levy.

Prime Minister Michel Barnier’s cabinet will on Wednesday consider using a controversial measure under which a law can be adopted without a national assembly vote to pass its 2025 budget, government spokeswoman Maud Bregeon said.

The government had proposed a special tax on the rich for three years to help reduce a crippling public deficit which it estimates could hit 6.1 percent of gross domestic product in 2024.

But in a vote late Tuesday, deputies from a left wing coalition joined with the centrist Modem party, a part of the government coalition, to make the tax permanent.

The government estimates that the tax on households where a single person earns more than 250,000 euros ($270,000) a year, or a couple more than 500,000 euros a year, will bring in two billion euros in 2025. But it had insisted the measure would be “exceptional”.

“Victory!” declared Mathilde Panot, parliamentary leader of the hard left France Unbowed (LFI) party.

“You ask everyone to make an effort (…) and the only ones whom you say ‘don’t worry, it’s exceptional!’ are those who have plenty to live on,” added LFI deputy Eric Coquerel, head of the national assembly finance commission.

Mathieu Lefevre, a lawmaker for President Emmanuel Macron’s centrist Rebirth party condemned the national assembly vote as a kind of “permanent tax revenge” and called for the government to use its right to pass a law without a vote.

Bregeon said the cabinet would discuss Wednesday using a so-called Article 49.3 adoption of a law, which would avoid a parliament vote, to get the government’s version of the budget passed.

“It is a constitutional possibility,” Bregeon told France 2 television but it was not the prime minister’s “desire”.

Barnier’s government which took office in September after a July election left France with no single party able to govern alone.

With the backing of only 212 members in the 577 seat national assembly, it will rely on the support of the far-right National Rally (FN) to survive.