French President Emmanuel Macron has announced dramatic new concessions including an income raise for minimum-wage workers and tax cuts for some pensioners and overtime workers in an attempt to quell weeks of violent anti-government protests.
For the past several weeks, France has been in the grip of widespread protests and riots that have led to clashes with police, leaving several people dead, hundreds more injured, and thousands of dollars’ worth of property damaged. On Sunday, after yet another round of violent protests, Paris’s top prosecutor announced that some 1,000 people were being held in police custody.
The protests began around November 17 and were initially in response to Macron’s announcement of a new gas tax. But the demonstrations have since morphed into a broader indictment of Macron’s handling of the French economy and his perceived elitist disregard for France’s working and middle classes.
France’s economy is growing, but very slowly. Most of the growth is centered in its major cities, like Paris, and those on the periphery and in rural communities haven’t seen as many gains. What’s more, Macron has been cutting spending to popular, longstanding social welfare programs and scaling back labor protections. He’s made it easier for companies to hire and fire employees and fought unions to end subsidies for certain sectors.
As New York magazine reports:
In May, thousands of high-school students joined unionists and civil servants to protest Macron’s plan to cut 120,000 civil service jobs in addition to a reduction in benefits for France’s railway workers, who are unionized, public-sector employees. Macron’s 2019 budget “includes an €18.8 billion reduction in payroll and other business taxes to encourage hiring and investment,” the Times reported in October. That’s a continuation of tax policies he premiered not long after taking office in 2017; a newly empowered Macron moved swiftly to cut taxes for corporations and for the wealthiest 10 percent of French households.
But all of that was before the protests erupted.
Now Macron is backing down — and offering “immediate and concrete measures” to address the protesters’ grievances and try to restore order to the country.
Macron is desperately trying to calm the protests
The embattled French leader appeared on French television on Monday to deliver a 13-minute, prerecorded speech announcing the new policies.
“We will respond to the economic and social urgency with strong measures, by cutting taxes more rapidly, by keeping our spending under control, but not with U-turns,” Macron said.
Yet a U-turn is precisely what the new policy pledges look like. They include a plan to raise the incomes of minimum-wage workers to around €100 per month (roughly $113), in part through a government wage subsidy; an end to taxes on overtime work starting January 1; and the cancellation of an impending tax hike on pensioners who earn less than €2,000 per month. Macron also called on businesses to give their employees year-end bonuses.
However, Macron declined to bring back the solidarity tax on wealth — a direct tax on people with real estate assets worth more than €1.3 million (roughly $1.47 million) — which his government did away with back in September. “Our country had huge problems during the many decades in which we did have a wealth tax,” he said in his speech.
But the French president did pledge to tackle tax evasion more aggressively, saying that “France needs to make sure that the rich and the big corporations pay the taxes they owe.”
It’s unclear if Macron’s latest measures will be enough to pacify the protesters, or whether they will continue to demonstrate until Macron is forced to make even more dramatic concessions.
Editor’s Note: This post has been updated to clarify the details of President Emmanuel Macron’s new policies.