(MENAFN- Live Mint) French Prime Minister Sebastien Lecornu survived two no-confidence votes on Thursday, October 16. The no-confidence votes followed his announcement of plans to suspend a contentious pension law in order to win support in the National Assembly.

The first motion proposed by the far left's France Unbowed was defeated when only 271 lawmakers backed it, falling short of the 289 majority needed to force a premier to resign. The second, tabled by the far-right National Rally, garnered 144 votes.

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Lecornu's survival brings some respite from a political crisis that came close to triggering snap elections this week and leaving the country with no plan for tackling its bloated budget deficit. Avoiding another government collapse has also reassured investors, which has brought down France's borrowing costs.

The French-German 10-year bond yield spread - a key measure of risk - was little changed at 78 basis points. It was more than 89 basis points last week. The country's benchmark CAC 40 Index ticked a bit higher, up 0.8% and outperforming European peers.

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Sebastien Lecornu pledged to suspend the 2023 law that gradually raises the minimum retirement age to 64 from 62. The socialist lawmakers, who hold a pivotal role in parliament, stated that they would support the government on this matter.

But suspending the application of the pension law comes at a political cost for President Emmanuel Macron, for whom the overhaul was an emblem of his pro-business economic policy.

It also has a financial cost of €400 million ($465 million) next year and €1.8 billion in 2027, according to government calculations.

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The path ahead for pensions and the budget is also unclear as Lecornu has said he won't use a constitutional provision - called article 49.3 - to bypass a vote in parliament, handing lawmakers far greater control over legislation.

That heralds an unpredictable shift in the dynamic at the National Assembly as minority governments had until now relied on the tool to shut down more radical proposals by lawmakers.

Socialists are already pushing back against measures to cut spending, including a freeze in welfare and pension payments, and have warned that their decision not to censure Lecornu on Thursday doesn't give the premier a blank check.

“We'll see what's in the budget; we've made no commitment to vote for it,” Boris Vallaud, the head of the Socialist group in the National Assembly, said on Franceinfo radio Wednesday.

(With Bloomberg inputs)

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