To quell unrest, France’s Macron speeds up tax cuts but vows no U-turn

French President Emmanuel Macron speaks during a special address to the nation, his first public comments after four weeks of nationwide 'yellow vest' (gilet jaune) protests, at the Elysee Palace in Paris, France, on Dec 10, 2018.
French President Emmanuel Macron speaks during a special address to the nation, his first public comments after four weeks of nationwide 'yellow vest' (gilet jaune) protests, at the Elysee Palace in Paris, France, on Dec 10, 2018.PHOTO: AFP

PARIS (REUTERS) - President Emmanuel Macron on Monday (Dec 10) announced wage rises for the poorest workers and tax cuts for pensioners, offering concessions after weeks of often violent protests that have challenged his authority.

In his first national address following two weekends of the worst unrest in France in years, Macron sought to restore calm after accusations that his political methods and economic policies were fracturing the country.

"We want a France where one can live in dignity through one's work and on this we have gone too slowly," Macron said on primetime television.

"I ask the government and Parliament to do what is necessary."

The President's address came 48 hours after protesters fought street battles with riot police in Paris, hurling missiles, torching cars and looting shops.

Macron faces a delicate task: He needs to persuade the middle class and blue-collar workers that he hears their anger over a squeeze on household spending, without being exposed to charges of caving in to street politics.

He said people on the minimum wage would see their salaries increase by €100 (S$156) a month from 2019 without extra costs to employers.

Pensioners earning less than €2,000 would see a recent increase in social security taxes scrapped, Macron said, going back on a measure that had particularly hurt his popularity with older voters. “The effort we asked for was too big and was not fair.” 

 
 

But he also said he would stick to his reform agenda and refused to reinstate a wealth tax.

"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.

His labour minister said the government would top up small salaries. 

Asked whether the budget deficit would be kept below the EU limit of 3 per cent, an Elysee official said France had some wiggle room on spending if a one-off tax rebate, which inflates its deficit by €20 billion in 2019, was not taken into account. 

Olivier Dussopt, junior minister for public accounts, said on BFM TV the measures would cost €8 billion to €10 billion.  

The 40-year old former investment banker was also under pressure to make amends about cutting remarks he has made about the costs of welfare that critics say made him look aloof and arrogant. 

“No doubt over the past year and a half we have not provided answers that were strong and quick enough. I take my share of responsibility,” Macron said.  “I may have given the impression that I did not care about that, that I had other priorities. I also know that I have hurt some of you with my words.”

Political opponents, who have largely failed so far to tap into the discontent from the leaderless “yellow vest”, criticised Macron’s response as insufficient. 

“Emmanuel Macron thought he could hand out some cash to calm the citizen’s insurrection that has erupted,” said Jean-Luc Melenchon, leader of the far-left La France Insoumise.  “I believe that Act V (of the protests) will play out on Saturday,” he said, referring to a new round of protests planned this weekend. 

One of the faces of the “yellow vest” movement appeared unconvinced as well.  “In terms of substance, these are half measures. We can feel that Macron has got a lot more to give,” Benjamin Cauchy, who met the French leader last week, told France 2 television.