PARIS (MNI) – The lower house of the French parliament, the
National Assembly, ratified on Tuesday with an overwhelming majority of
477 to 70 a package of bills allowing France to sign on to the EU Fiscal
Compact aimed at eliminating public deficits over the medium term.

After the country’s Constitution Court ruled in August in favor of
the new Socialist government’s plan to apply a cap on budget deficits
through an overriding “organic” law and not a constitutional amendment,
the Assembly’s vote marks the penultimate step toward formal
ratification of the Compact. The upper house, the Senate, is scheduled
to open the debate on the bills on Wednesday.

Yet today’s vote is only a partial victory for the government,
since the debate over the Compact once again revealed the rifts within
the Socialist Party over the enhanced powers of Brussels bureaucrats to
intervene in one of the few remaining domains where national parliaments
retain semblance of sovereignty.

Despite repeated assurances from the prime minister and the finance
minister that deficit limits would still allow the government and
parliament to set down national budget priorities within the framework
of the Compact and much cajoling and political pressure by the
parliamentary whip on recalcitrant lawmakers unwilling to seeing budget
austerity written in stone, a handful of left-wing Socialists remained
opposed.

During his election campaign, President Francois Hollande himself
had pledged to renegotiate the Compact initially proposed and signed by
his predecessor Nicolas Sarkozy. After convincing his Eurozone partners
of the need for flanking measures to stimulate economic growth and
obtaining a modest package of E120 billion, Hollande signed on to the
Compact.

The Socialists’ junior coalition partner, the Ecologists, were also
profoundly split over the Compact and voted largely against it. The
Leftist Front was adamantly opposed and demanded a public referendum on
the issue. It was the thanks to the broad support of Sarkozy’s UMP party
and a several small centrist parties that the package was passed with a
solid majority.

–Paris newsroom +331 4271 5540; Email: ssandelius@marketnews.com.

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