French government defends concessions to end protest crisis

Paris: Emmanuel Macron’s government on Tuesday defended a financial relief package to quell the “yellow vest” revolt over taxes and living standards, hoping to end protests which have spiralled into violence in Paris and other cities.
Over 21 million people watched a visibly contrite Macron declare a “state of economic and social emergency” in a televised address on Monday, promising billions of euros in aid for the lowest earners.
It was a stark retreat for the 40-year-old former investment banker, who until now had vigorously argued his tax policies and economic reforms were the only way to prepare France for the challenges of the 21st century.
The new measures, including a 100-euro jump in the minimum wage next year, are expected to cost up to 11 billion euros ($12.5 billion) — and are likely to put France on a collision course with Brussels.
The government had already scrapped fuel tax increases set for January — a core demand of the yellow vests — which will cost a further 4.5 billion euros.
The country’s deficit is likely to exceed the EU’s mandated 3.0 per cent of GDP limit at least “temporarily,” Richard Ferrand, the parliament president from Macron’s Republic on the Move party, told RTL radio.
Having “a stable France” is the priority as the protests expose deep social divisions while taking a heavy economic toll, Ferrand said, adding: “We can’t continue like this.”
Even so, the measures might not mollify enough protesters to call off road blockades and weekly demonstrations in Paris which have seen fierce clashes with police and extensive burning and looting over the past two Saturdays.
Although some “yellow vests” were open to Macron’s olive branches, others said they were not ready to call a halt to the protests.
“Initially I thought Macron had heard us at least a bit, but when you look at the details, he hasn’t at all,” said Thomas Miralles, a yellow vest spokesman in the southern Pyrenees-Orientales department.
The “yellow vest” movement which erupted via social media in October has enjoyed broad public support, but recent surveys suggest it may be waning.
Government spokesman Benjamin Griveaux told BFM television that the minimum wage hike, including a planned inflation adjustment, would put an additional 125 euros in the pockets of millions of the lowest earners.
It won’t weigh on firms’ finances since the increase will come via a higher monthly government top-up of 80 euros for low earners and a 20-euro reduction in payroll charges.
Macron will also do away with payroll taxes on overtime hours, while scrapping a tax on pensioners earning less than 2,000 euros a month. — AFP