France gives initial green light to EU fiscal pact

French President Francois Hollande's Socialist-led government kickstarted ratification today of a European Union budget discipline pact it grudgingly accepts as the next step out of the euro zone debt crisis.

Prime Minister Jean-Marc Ayrault's cabinet gave initial approval to the fiscal compact agreed in March by Hollande's predecessor Nicolas Sarkozy and 24 other European leaders, which requires euro zone countries to slash their public deficits or face sanctions such as fines.

The cabinet's green light paves the way for official parliamentary ratification next month, despite noisy dissent within Hollande's left-leaning coalition and growing public disenchantment with the European Union. With unemployment running at a 13-year high, French voters are hostile to the prospect of further prescribed austerity.

Acknowledging the reservations of many left-wing legislators, Ayrault appealed to the Socialists and their parliamentary allies to back the bill and save the government the embarrassmeant of relying on Sarkozy's conservative UMP party.

"There are still waverers and those who are hostile ... My objective, and the government's, is to convince the highest number possible," Ayrault told a news conference.

"Parliament's approval, which I hope will be massive, will give even more force to the president's voice in European negotiations."

To sweeten the pill - and to try to take the sting out of a series of planned street protests against the pact - the government will present a bill to parliament on Oct. 2 alongside a package of EU-wide growth measures secured by Hollande at his first EU summit in June.

Nonetheless, some Socialists are likely to break ranks over a bill seen as a reminder of Sarkozy's close links with German Chancellor Angela Merkel and his support for Berlin's demands for austerity in Europe.

"We don't like this pact, it is a Sarkozy legacy," said Elisabeth Guigou, head of parliament's foreign affairs committee and one of the senior Socialists tasked with rallying the coalition behind the accord. "But you don't have to love a pact to ratify it. It's one part of a deal and just the first step."