French President Emmanuel Macron may institute emergency tax cuts in an attempt to stem violent protests which have gripped France for three weeks, according to Bloomberg.
The government is increasingly worried that the economy, alongside its own political fortunes, is threatened by demonstrations against fuel taxes that have spiraled into a push-back against Macron’s policies.
Finance Minister Bruno Le Maire said the impact of the riots was “severe,” and left a meeting of finance ministers in Brussels to return to Paris for crisis talks with colleagues.
In order to make the tax cuts work, the French government will need to find ways to cut spending that doesn’t hobble growth, as well as tax measures that will stimulate the economy.
For Macron, the stakes are high as he doesn’t want to damage the credibility he needs to push for reforms in Europe. The European Commission has already said his existing budget is at risk of non-compliance with EU rules.
According to Marc Touati, economist and president of business consultancy ACDEFI, Macron may be forced to take a more radical approach, even if that means the deficit slipping a bit. -Bloomberg
The protests have crippled revenues across the country, with some large supermarkets seeing drops as much as 25 percent. Hotel bookings have suffered a similar fate.
Toll-road operators Vinci SA and Eiffage SA meanwhile have seen their share prices decline as they have opened toll booths to let cars pass freely.
Whatever Macron has planned, he better act fast – as there are currently 15,000 angry French Yellow Vests signed up for next Saturday’s protests in Paris; three times as many as last weekend, while 104,000 are a “maybe.”
Leaders of the so-called “Yellow Vest” movement have rejected demands to negotiate with the French government after President Emmanuel Macron ordered his prime minister to hold discussions, according to AFP. Macron and top officials are now in full damage control mode amid the most violent protests France has seen since 1968.
Approximately 136,000 demonstrators donning yellow reflective vests were recorded across France on Saturday – of which approximately 15,500 protested in the French capital according to the interior ministry. The previous weekend saw 166,000 demonstrators, and 282,000 the week before that.
Conservative leader Marine Le Pen who attended the meeting warned that Macron could become the first French president to order troops to open fire on his own people in 50 years, and that he should abandon his plan to raise taxes on fuel while lowering gas and electricity prices.