French lawmakers adopt law on EU fiscal pact

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PARIS (Reuters) – France’s lower house of parliament adopted on Wednesday the law needed to enact a European Union fiscal discipline treaty obliging governments to balance their budgets or face sanctions.

Lawmakers voted 490 in favor of the legislation with 34 against in what was largely a formality a day after they had voted to ratify the budget pact itself, created by European leaders in March with the aim of restoring euro zone stability.

The law, which is due to go to the Senate upper house on October 29, calls for an independent public finances commission to be set up to monitor whether the government is sticking to its deficit-cutting commitments.

President Francois Hollande’s Socialist government managed to rally the bulk of his coalition behind the fiscal pact after warning them that a vote against it would threaten euro zone stability. The measure passed easily with support from the right-wing opposition.

Hollande originally opposed the pact, which his conservative predecessor Nicolas Sarkozy had signed up to. However Hollande later backed it after getting EU partners to complement the accord with growth-supporting measures.

Polls show Hollande’s popularity ratings have plummeted to as low as 41 percent from 55 percent just after his May election as unemployment rises to 13-year highs.

Economists fear tax hikes contained in a 2013 budget aimed at reducing France’s deficit to three percent of output next year will further hurt economic growth.

(Reporting by Emile Picy- Writing by Leigh Thomas- editing by Mark John)

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