French President Emmanuel Macron
The French government is preparing to suspend fuel tax increases after weeks of sometimes violent protests, a government source said on Tuesday, in what would mark a major U-turn by President Emmanuel Macron after 18 months in office.
Prime Minister Edouard Philippe was due to announce the suspension later on Tuesday, the source said, although it was unclear whether he would announce a time-limited "moratorium" or abandon the next carbon-tax increase entirely.
The so-called "yellow vest" movement, which started on Nov. 17 as a social-media-organised protest group named for the high-visibility jackets all motorists in France must have in their cars, has focused on denouncing a squeeze on household spending brought about by Macron's taxes on fuel.
The president says the taxes are needed to combat climate change. Ditching them could be a major embarrassment as governments meet in Poland to try to pin down measures to avert the most damaging consequences of global warming.
Protesters wearing yellow vests (gilets jaunes) stage a demonstration against rising oil prices and living costs outside the parliament building in the Hague, the Netherlands on December 01, 2018.
'Yellow Vest' protests spread from France to the Netherlands
However, over the past three weeks the protests have evolved into a wider anti-Macron uprising, with many criticising the president for pursuing policies they say favour the rich and do nothing to help the working poor.
Despite mostly peaceful nationwide demonstrations, the protests have turned violent on successive weekends in Paris. On Saturday, the Arc de Triomphe national monument was defaced and avenues off the Champs Elysees were damaged. Cars, buildings and some cafes were torched.
The unrest is estimated to have cost the economy millions, with large-scale disruption to retailers, wholesalers, the restaurant and hotel trades. In some areas, manufacturing has been hit in the run up to Christmas.
Senior members of Macron's La Republique En Marche party said the government could also increase the minimum wage from January along with other measures to deliver a quick boost low-income households, although the details remained unclear.
French President Emmanuel Macron and his wife Brigitte were surprised to find an airport employee in a “yellow vest” to welcome them in Buenos Aires after an Argentinian delegation was late to greet them.
Macron greeted by ‘yellow vest’ in Argentina
CHANGE FRANCE?
Macron, a 40-year-old former investment banker and economy minister, came to office in mid-2017 promising to overhaul the French economy, revitalise growth and draw foreign investment by making the nation a more attractive place to do business.
In short order he made changes to the labour code to make hiring and firing easier, he took on the rail unions by forcing through changes to the national rail company, and he cut wealth taxes in a bid to stimulate investment.
However, in the process he earned the tag "president of the rich" for seeming to do more to court big business and ease the tax burden on the wealthy. Discontent has steadily risen among blue-collar workers and the middle-class struggling to make ends meet.
The government's decision to push ahead with an increase in fuel taxes from January, part of a longer-term effort to discourage fossil fuel use, angered people in rural or outer urban areas who use their cars more.
Three weeks of "yellow vest" protests have dealt a serious blow to the French economy with retailers, hotel chains, high-street stores and restaurants all seeing a significant fall in trade, Finance Minister Bruno Le Maire said on Monday.Speaking after a meeting with industry groups and business federations affected by the movement, Le Maire said sector revenues had been hit by between 15 and 50 percent.Video: French ambulance drivers stage protest against Macron's reformsWhile he did not provide a precise breakdown, Le Maire said small retailers had seen a fall in revenue of between 20 and 40 percent, the hotel industry was seeing reservations down 15 to 25 percent and restaurants, depending on their location, had seen takings collapse by between 20 and 50 percent."The impact is severe and ongoing," Le Maire said, emphasising that it was nationwide, although Paris, after riots and looting in some of its most upmarket districts on Saturday afternoon and evening, was particularly affected.The finance ministry was not able to say what sort of impact the unrest would have on gross domestic product.Video: Hundreds arrested during Paris protestsFrance's Macron learns the hard way: green taxes carry political risksFrance's Macron visits Arc de Triomphe after Saturday Paris riots
Economic impact of yellow vest protests 'severe': French fin min
It was not immediately clear if suspending the tax rise would be enough to placate the "yellow vests" or head off a repeat of the violence that erupted in Paris on Saturday, which officials said was driven by extreme groups on the far-left and far-right, such as the Black bloc and anarchist factions.
The U-turn could also undermine Macron's credentials as a "new style" president willing to shake up France.
He has said repeatedly that he will not back down but with his ratings barely above 20 percent and with other major changes in the pipeline, including pensions reform, party officials say he needs to find a way of cooling the turbulent atmosphere.
He is also aware that the anti-establishment fervour spurring the yellow vests on could spell trouble in next year's European election.
Macron has described that election as a battle between progressives like himself and populists on the far-right and the far-left, who have made recent gains in the polls on the back of the popular discontent.
French stocks sensitive to the economy and to tourism fell in an otherwise buoyant market on Monday after the worst riots in decades swept Paris, stirring concerns about the possible damage from visitors steering clear of the capital.Supermarket Carrefour and highway operator Vinci were the worst-performing, down 2.1 and 2.6 percent respectively. Shares in hotel chain Accor and airline Air France fell by 1.6 and 2.7 percent.Nationwide protests against fuel taxes and living costs, known as the "yellow vest" movement after fluorescent jackets kept in all vehicles in France, escalated on Saturday as rioters ran amok across central Paris, torching cars and looting shops.Macron to call on US funds to build French start-ups, not steal themInvestors and traders connected the stock falls to investors' unease over the potential impact riots could have on the economy and on tourists' appetite to visit the capital."Accor is falling, and it is fair to say that investors are wondering if there will be cancellations at their hotels," said Jerome Schupp, a fund manager at Geneva-based firm Prime Partners."It's not good to see those images of a major capital," said a trader. "It could hurt the economy."Highway operator Vinci Autoroutes said the "yellow vest" protests were continuing to have a major impact, although it did not specify any figures in a press release on Monday morning.French PM meets opposition as Macron seeks way out of 'yellow vest' crisisTraders said the earnings conglomerate Vinci gets from its motorway concessions could be hit by the protests, which have blocked toll roads across France.Oil major Total said on Monday several dozen of its gasoline stations had run dry as a more than two-week long protest over fuel tax hikes began to impact fuel reserves and distribution.The falls came even as France's top stock index climbed 1.7 percent, on track for its best day in a month after a truce in the U.S.-China trade war lifted global markets. Total says fuel stations running dry due to 'yellow vest' protestsFrance must speed up tax cuts, says Finance Minister Le Maire
Paris riots hurt French tourism and transport stocks
French President Emmanuel Macron will urge a visiting group of top Silicon Valley venture capitalists this week to invest in the nation's start-ups while calling on them not to "steal" the best creations, four sources told Reuters.The discreet event, not mentioned in Macron's official schedule, comes at a tough time for the French leader after rioters looted and ransacked boutiques and businesses in central Paris, chaotic images beamed around the world.Executives from some of the biggest names in U.S. tech funding, including Andreessen Horowitz, Sequoia Capital and General Atlantic, are among the 40 expected in Paris on Wednesday and Thursday for a tour of the French startup scene.Egypt, France begin war games in Red SeaThe two-day roadshow includes presentations from what sources called tech 'superstars' already investing in France as well as visits to hubs such as the Station F tech incubator in eastern Paris.But instead of simply urging them to invest in France, Macron, who is scheduled to host the investors at the Elysee palace on Thursday evening, will also tell the U.S. funds to help French businesses to flourish rather than pushing the best French entrepreneurs to move to the United States."Today, many French companies raise money in the U.S., and the usual reflex of U.S venture capitalists is to tell them: 'come to the United States then'," a source at Macron's office told Reuters.France's Macron learns the hard way: green taxes carry political risksFrance's Macron visits Arc de Triomphe after Saturday Paris riots"We will tell them: it's an ecosystem, your best interest is to do like in Britain and Israel: invest here and don't move everything (to the U.S.)," the source said.The event was scheduled before the nationwide protests that turned the French capital into a battle zone and the format of Macron's appearance has yet to be finalised, sources said.With his authority challenged by the "yellow vest" protesters, who sprawled anti-capitalist slogans on banks and luxury boutiques on Saturday, Macron has his work cut out to counter the damage done to France's image.Brexit BenefitThe French tech scene has seen a boom in recent years, helped by Macron's efforts to turn France into a "startup nation", as a new generation of tech-savvy entrepreneurs less interested in government careers tap into the large pool of engineers that France's top universities produce every year.'Yellow vest' protests spread to NetherlandsMacron vows punishment for violent Paris protestsMacron aides say France's tech sector is poised to take advantage of Britain's planned exit from the EU to overtake its major European rival."We think the French ecosystem will outgrow the one in England in the coming years," is one of the messages the U.S. investors will hear, the Elysee source said. Goldman Sachs and private equity fund KKR are also among the attendees.But French companies say the most promising startups need access to bigger funding rounds if they are to stay. Investments are not large enough to create "unicorns" worth more than $1 billion. So far this year, only two French firms have closed investment rounds of more than 100 million euros.France to consider state of emergency to prevent riots recurringFrench police clash with 'yellow vest' protesters in Paris, 122 arrestedInstead, successful French startups get snapped up by U.S. rivals, with social mapping firm Zenly's acquisition by SnapChat last year particularly riling the French tech scene.Investors on the two-day visit will tour Station F, a startup campus funded by telecoms billionaire Xavier Niel. They will meet entrepreneurs such as David Gurle, boss of U.S. encrypted messaging service Symphony, who moved its research centre to a technology park in southeastern France.Among other U.S. tech figures who have chosen to relocate to France and who will make pitches are Tony Fadell, a developer of Apple's iPhone, and Ian Rogers, a former executive at its media player iTunes, now chief digital officer of luxury group LVMH. French police brace for more violent protests over rising fuel costsMacron, Abe to discuss Renault-Nissan at G20 as feud brews
Macron to call on US funds to build French start-ups, not steal them
France's prime minister held talks with opposition party leaders on Monday as President Emmanuel Macron sought a way to defuse nationwide protests over high living costs that led to widespread rioting and vandalism in Paris at the weekend.The "yellow vest" revolt caught Macron unawares when it erupted on Nov. 17 and poses a formidable challenge to the 40-year-old as he tries to counter a plunge in popularity over his economic reforms, which are seen as favouring the wealthy.Riot police were overrun on Saturday as protesters wrought havoc in Paris's fanciest neighbourhoods, torching dozens of cars, looting boutiques and smashing up luxury private homes and cafes in the worst disturbances the capital has seen since 1968.France's Macron learns the hard way: green taxes carry political risksOn Monday, protesters were blocking access to 11 fuel depots belonging to the oil company Total, and 75 of its filling stations had run dry, a company spokesman said.The "yellow vest" movement, whose supporters cut across age, job profile and geographical region, began online as an impromptu rebellion against higher fuel prices but has morphed into a broader outpouring of anger over the squeeze that living costs are putting on middle-class household budgets.The movement, whose members span the political spectrum and include radical fringe elements, has no clear leadership, making talks all the more complicated for the government.France's Macron visits Arc de Triomphe after Saturday Paris riotsTheir core demand is a freeze on further planned fuel tax increases -- the next is due in January -- and measures to help bolster spending power. But they have also called for Macron to go, and many talk up the idea of revolution.The government is struggling for a way to engage."Making a small gesture and then sweeping the problem under the carpet, just as has always been done for the last 30 years, does nothing to solve the deeper, structural problems," government spokesman Benjamin Griveaux told France Inter radio."It will just start over six months down the line ... That wouldn't be respectful of anyone."Macron vows punishment for violent Paris protestsPublic support for the "yellow vests" remains high, with seven in 10 people backing their protest, a Harris Interactive opinion poll conducted after Saturday's unrest suggested.Anti-Establishment AngerMacron says the increased fuel taxes are part of his effort to combat climate change, wanting to persuade French drivers to exchange diesel-fuelled cars for less polluting models. He said on Saturday he would not deviate from his policy goals.As governments from around the world began a two-week conference in Poland to try to pin down measures to avert the most damaging consequences of global warming, the protests highlighted how costly some of those actions are likely to be.France to consider state of emergency to prevent riots recurringChristophe Chalencon, one of around eight semi-official spokespeople for the "yellow vests", told BFM TV he would not enter talks only to "negotiate over peanuts".Laurent Wauquiez, head of the biggest opposition party, the centre-right Les Republicains, has called for a referendum on Macron's energy transition plan. Jean-Luc Melenchon, head of the hard-left La France Insoumise (France Unbowed), and Marine Le Pen, head of the far-right, have called for parliament to be dissolved and snap elections held.The hitherto uncompromising response of Macron, a former investment banker, has only reinforced a view among the hard-pressed middle-class and blue-collar workers that he is part of an urban elite contemptuous of their world.French police clash with 'yellow vest' protesters in Paris, 122 arrestedThe anti-establishment anger spurring the yellow vests on could spell trouble for Macron in next year's European elections. These are traditionally fertile ground for the far-right and Le Pen already leads surveys of voting intentions.Saturday's unrest was the worst in central Paris since a student uprising five decades ago. At times, riot police appeared overwhelmed. The Arc de Triomphe, a unifiying national monument that houses the tomb of the unknown soldier, was defaced, and a bust of national symbol Marianne was smashed.French police brace for more violent protests over rising fuel costsMacron says global experts needed for Khashoggi probes
French PM meets opposition as Macron seeks way out of 'yellow vest' crisis