Gregory Viscusi

What started in November as a grassroots movement against plans to hike gas taxes has spiraled into widespread anger about the rising cost of living, forcing French President Emmanuel Macron into a stimulus plan for households. Weekly Saturday demonstrations have attracted more than 100,000 people and at times turned violent, tarnishing France’s reputation with images of torched cars and tear gas flying. Discontent has been fueled by criticism that Macron, the youngest French leader since Napoleon, is out of touch with average people. After scrapping the fuel tax failed to appease the Yellow Vests, he used a televised mea culpa to announce a flurry of expensive measures aimed at boosting purchasing power.

1. What sparked the protests?

The initial discontent focused on plans to raise hydrocarbon taxes to curb emissions and fund incentives for cleaner cars and home-heating systems. The hikes were set to take effect on Jan. 1. For many in France’s small towns and rural areas, who rely on cars and have seen public services dwindle, it was a final straw. An online petition grew into a grassroots movement organized through social media and divided into local chapters carrying out local actions. They named themselves after the “gilets jaunes,” or reflective yellow safety vests, that French motorists are required to carry in their cars in case of an emergency. Demands by the loosely affiliated protesters have expanded from there, ranging from raising the minimum wage, increasing retirees’ pensions and restoring the wealth tax to calls by some for Macron to resign.

2. How has Macron responded?

At first his government sought to dismiss the movement. Macron himself didn’t mention it until Dec. 1, the day of the most violent protests that saw rioters deface the Arc de Triomphe. Three days later, the government suspended the fuel tax for six months, before scrapping it altogether. When blockades continued, and another Saturday protest saw an estimated 138,000 people take to the streets, Macron sprung into action. He said he’ll raise the effective minimum wage, abolish taxes on overtime, and get rid of a controversial tax on pensions. He also called on French companies to help out by offering employees a year-end bonus, which would be tax free.

3. Are the Yellow Vests happy now?

Not so fast. Many people continued protesting on the roadsides of France following Macron’s measures, citing disparate demands that still haven’t been addressed, a general malaise stemming from 19 months of Macron’s bold economic reforms and contempt for the 40-year-old former banker. There have been calls for the Saturday protests to continue. Others argued for a break from the big demonstrations in Paris and other major cities, but not because they were satisfied. Instead they argued that they should let police focus on fighting crime and terrorism after a possible terror attack at Strasbourg’s Christmas market.

4. 4. What more can the government do?

It’s tough to say. The cost of the moves so far will almost certainly see France breach the European Union’s budget deficit ceiling next year. Macron is arguing that the concessions are necessary to maintain public support for his efforts to make the economy more efficient, including reforming labor laws to make it easier to hire and fire workers. And Prime Minister Edouard Philippe has promised extra taxes on businesses and new spending cuts. However, any perception France is getting special treatment from the EU may bring outrage from other governments like Italy and Greece.

5. What’s at stake for Macron?

Macron had bet that by front-loading unpopular, but in his view necessary reforms, the benefits would become clear by the time he faced re-election in 2022. But with his approval ratings in free fall, European parliamentary elections and a series of municipal and regional votes in 2019 and 2020 could shape up as referendums on his policies. Surveys show that many Yellow Vest activists are likely to vote for either Marine Le Pen’s anti-immigrant National Rally or Jean-Luc Melenchon’s far-left France Unbowed. Both party leaders were defeated by Macron in the 2017 presidential election and eye another shot at power. Any breakthroughs by those parties in the May European elections will make it difficult for Macron to push on with his agenda — for France and beyond.

6. What’s the cost to France?

Coming at the crucial holiday shopping and tourist season, Finance Minister Bruno Le Maire called the movement “a catastrophe for our economy.” As of Dec. 10, it had knocked a 10th of a percentage point off economic growth for the quarter. Retailers have lost sales totaling at least 1 billion euros ($1.14 billion) due to the protests, according to industry estimates. In Paris, many retailers boarded their windows in anticipation of Saturday protests that focused on the Champs-Elysees and surrounding avenues. Iconic department stores like the Galeries Lafayette and Printemps were closed on a December weekend day that would typically be a peak for holiday shopping. Tourist operators also say they’ve taken a hit. As images of destructive clashes in Paris were broadcast worldwide, tourist reservations to the city fell 40 to 50 percent compared with the previous year.

7. So why do people support the Yellow Vests?

France is accustomed to violent protests. After all, the nation’s identity was formed by the 1789 revolution. The Yellow Vest protests are the fifth of a series of major public uprisings in the past half-century that have helped shape the nation as it is today. Polls at one point showed that three-quarters of the French support the Yellow Vest demands, even if they also disapprove of the violence that’s accompanied some of the protests. What’s different this time is that the Yellow Vests lack a central organization, meaning there’s no one to negotiate with. In the past, France’s unions, historically the source of popular protests, had tight control over members allowing them to end strikes and demonstrations as quickly as they started them. Now the unions aren’t as formidable as they once were.

Source; Washington Post