French govt retreats on fuel tax hikes

More concessions mooted as experts say U-turn is more like political expediency

The French government's compromise on fuel tax hikes after Paris' worst rioting in decades will not easily extinguish the anger of protesters as their concerns have become more wide-ranging, experts say.

Paris announced on Tuesday the suspension of fuel tax increases for six months, in a bid to quell fierce protests that have endangered French President Emmanuel Macron's presidency.

The concession also marks the first time Macron has given ground in the face of public opposition.

With more people joining in the demonstrations in the past few weeks, the appeals of protesters are not only focused on the fuel tax increase, but also around other economic issues, said Wang Peng, an associate research fellow of the Chongyang Institute for Financial Studies of Renmin University of China.

After weeks of demonstrations, the protests now include a wide range of complaints, including the stagnant economy, social injustice and France's tax system, and they also call for Macron to resign.

Wang said that Macron's U-turn on the fuel tax hikes is more like political expediency.

"Because making economic reforms is the French government's policy guideline, and also an essential way to rejuvenate the French economy. In the long run, the government will have to tackle difficulties to carry out these reforms, but at present, Macron is caught in a dilemma," he said.

The government signaled on Wednesday that it was prepared to make further concessions to "yellow vest" protesters, even raising a possible rollback on a controversial move to cut taxes for high earners last year.

"If something isn't working, we're not dumb, we'll change it," government spokesman Benjamin Griveaux said, saying the wealth tax would be evaluated between now and late next year.

Xue Sheng, a researcher on French issues at the Shanghai International Studies University, said that the protests over the fuel tax increase are only a small part of people's concerns over the economy. Macron has made a strong defense of his actions, and that also make it more difficult to ease public anger.

Macron has proposed a series of changes since he took office, including the plan to cut the cost of a generous unemployment insurance system and create more incentives for the jobless to take up work. But protesters said his reforms are for the rich and he doesn't understand the needs of poor people.

Wang said it is common for economic reforms to meet with resistance from ordinary people. Macron's decision to compromise will probably encourage more protesters to take a harder stance and try to push the government into further U-turns.

The protests against the government began on Nov 17 with motorists upset over a fuel tax hike. The violence over the weekend in Paris, in which more than 130 people were injured and over 400 were arrested, was the worst in the country in decades. Four people were killed in accidents linked to the demonstrations and road blockades.

For weeks, Macron held his ground on the fuel taxes, which are meant to finance anti-pollution policies but critics say unfairly weigh on drivers in rural and small-town France.

Planned tax increases on petrol and diesel on Jan 1 will be suspended for six months, while hikes in regulated electricity and gas prices will be frozen during the winter.

CHINA DAILY/AFP