France halts fuel tax hikes amid protests

France puts its fuel tax on hold after violent protests.

French flag
Source: Bloomberg

French Prime Minister, Edouard Philippe, has halted a proposed fuel tax hike in the wake of violent protests. There will be a six-month delay on carbon levy increases.

‘No tax is worth putting the nation's unity in danger’, said Philippe.

Yellow vests and protests

Many French residents have protested the increase in the country’s fuel tax since November. They wore yellow vests that all French drivers must have in their automobiles. What started as a simple demonstration from social media has disintegrated into violence. Cars have been burned, stores have been broken into, and monuments have been vandalised. Over 100 people were injured and more than 400 citizens were arrested this past weekend.

Protests started as being against the gas tax, but has morphed into disappointment with French President, Emanuel Macron. Yellow vest dissidents say that the government is ignoring the needs of working-class residents who can’t afford the increase.

Segolene Royal, a critic of Macron, is pleased with the halt in the tax hike, but feels the government should have taken action sooner.

‘This decision should have been taken from the start, as soon as the conflict emerged. We felt it was going to be very, very hard because we saw the rage, the exasperation, especially from retirees. They should have withdrawn [the tax hikes] right away. The more you let a conflict fester, the more you eventually have to concede’, said Royal.

What’s next for France

Philippe acknowledged that the protests have awakened him to anger that French citizens have about their government.

‘The French who have donned yellow vests want taxes to drop, and work to pay. That's also what we want. If I didn't manage to explain it, if the ruling majority didn't manage to convince the French, then something must change,’ said Philippe.

Observers like Charles Lichfield, an analyst from Eurasia Group, noted that the yellow vest protests could be the start of a long-term problem for France.

‘The movement has snowballed into general contestation of poor purchasing power, lack of opportunity and Macron's perceived arrogance, and will be very difficult to mollify,’ said Lichfield.

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