France suspends planned fuel tax hikes to end protests

PARIS (BLOOMBERG, REUTERS, AFP) – French President Emmanuel Macron’s government reversed course and suspended planned fuel tax hikes that had sent as many as 300,000 protesters into the streets for three weeks in sometimes violent clashes.

This means that planned increases in three taxes on fuel due to start on Jan 1 will be suspended for a six-month period.

Prime Minister Edouard Philippe announced the decision after detailing the plan in his regular Tuesday morning (Dec 4) meeting with governing party lawmakers.

“No tax merits putting the nation in danger,” Mr Philippe said in a televised address, adding that any future protests should be declared in advance and “take place calmly”.

The measures he announced did not include the supplemental increase in the minimum wage demanded by protesters.

The climbdown is a rare retreat by Mr Macron, who has prided himself on sticking to his policies and ignoring his tumbling popularity ratings. He has consistently defended the higher gasoline taxes, saying they are needed to wean the country off fossil fuels and have been compensated for by cuts to payroll taxes.

The so-called “yellow vest” movement – which started on Nov 17 as a social media-organised protest group named for the high-visibility jackets motorists in France must have in their cars – has focused on denouncing a squeeze on household spending brought about by Mr Macron’s taxes on fuel.

Even before the suspension was officially announced, members of Mr Macron’s Republic on the Move party saluted the turnaround, saying it would help calm the yellow vest protests.

“Yellow vests” and opposition parties said it was too little, too late.

“It’s a first step that could have come weeks ago without all the rancour,” said Mr Benjamin Cauchy, an early organiser of the “yellow vests”, on BFM TV.

“But the French won’t be satisfied with just crumbs, they want the whole baguette.”

He added that he wanted all recent gasoline tax hikes rolled back, and higher taxes on multinational companies.

Lawmakers in Mr Macron’s party also said the government plans to freeze upcoming increases on regulated electricity and gas prices in the wake of the protests over rising costs of living.

Stricter vehicle emission controls set to kick in next month will also be suspended, one of the demands of the yellow vest movement, Mr Philippe told lawmakers before his televised address.

Mr Stanislas Guerini, the head of Mr Macron’s party, said on RTL Radio that a moratorium on new gasoline taxes would allow a debate on France’s energy policies to take place in a “calmer atmosphere”.

Ms Marine Le Pen, head of the far-right National Rally party, which has supported the yellow vests in hopes of capturing their votes, said on Twitter that “a moratorium is just a delay. That clearly doesn’t live up to the expectations and the precariousness in which the French people are struggling”.

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