Explainer: ‘Yellow vest’ crisis exposes limits of French welfare system

FILE PHOTO: A view of the Place de la Republique as protesters wearing yellow vests gather during a national day of protest by the "yellow vests" movement in Paris, France, December 8, 2018. REUTERS/Stephane Mahe/File Photo

By Leigh Thomas

PARIS (Reuters) – France’s “yellow vest” protests have exposed a deep-rooted belief that society is not working for large swathes of the French population, especially outside major cities.

Driving the unrest is anger about rising living costs – particularly among low-paid workers – and a perception that President Emmanuel Macron is deaf to their needs as he presses on with reforms seen as favoring the wealthy.

The following graphics look at underlying economic and social indicators in France to try to explain why so many people believe the system is working against them.

IS THE FRENCH WELFARE SYSTEM GENEROUS?

Without welfare transfers, poverty and inequality in France would be among the highest in developed countries belonging to the Organisation for Economic Co-operation and Development, the Paris-based group estimates.

While many protesters rail against what they see as a gulf between them and the upper echelons of French society, OECD data suggests that the wealth divide is not as bad as in many other rich countries.

France’s extensive welfare system keeps the poverty rate at 14.3 percent, below the 18 percent OECD average and on a par with Scandinavian countries known for their egalitarianism.

Without tax and welfare payouts, nearly 42 percent of the population would be living in poverty, the highest rate among OECD countries for which recent data is available.

Likewise, France’s Gini coefficient, a gauge of income inequality, is slightly below the OECD average whereas without welfare transfers it would be among the highest, just behind Italy, Portugal and Greece, according to OECD data.

While a progressive tax system and generous welfare help narrow the wealth gap, it comes at a price as French taxpayers also bear the highest tax burden in the world.

Tax cuts on wealth and financial assets early on in Macron’s five-year term have added to middle-class taxpayers’ frustration and he has been criticized as being a president of the rich.

WHY DO MANY FEEL LEFT BEHIND?

Unlike Scandinavian countries, France’s poor have little hope of improving their lot in life despite the billions of euros the government spends on them, according to OECD data.

The OECD estimates it would take six generations for a person from a low-income family in France to reach an average income compared with only two generations in Denmark and an OECD average of 4.5.

“There are no rungs anymore on France’s social ladder,” Finance Minister Bruno Le Maire, a conservative, said on Monday.

While six generations is on a par with its neighbor Germany, the French have a deep attachment to the idea that state institutions, from schools to courts to government, are supposed to offer the same chance of success to all.

But despite income support for those on low incomes, they have little chance of doing better than their parents, according to a study last year by France Strategie , which is linked to the prime minister’s office.

The study found that a person whose father was a senior white-collar worker was 4.5 times more likely to belong to the wealthiest fifth of the population than someone whose father was a manual worker – largely because social origin correlates closely with one’s level of education.

While France is close to the average in international education comparisons, it has a bigger gulf between the scores of the lowest and highest performing upper school students, the OECD’s director of social affairs Stefano Scarpetta said.

WHY DO PEOPLE FEEL UNDER FINANCIAL PRESSURE?

The protests originally erupted in November over higher fuel taxes, that have since been scrapped, and general frustration about the high cost of living, sparking the worst street violence Paris has seen in decades.

With people on low incomes surviving on welfare handouts and the lower middle class squeezed by the tax burden, the French are highly sensitive to pressure on their daily budgets.

That helps explain a national obsession with purchasing power and French politicians are frequently judged on whether people are getting more spare cash.

While protesters largely ignored new tax breaks to boost purchasing power, official data lends credence to their claims that budgets are getting squeezed.

The pressure is increasingly coming from housing costs, which now absorb 23 percent of their budgets compared with 10 percent a generation ago, according to the official French statistics agency INSEE.

Meanwhile, a lack of jobs, deindustrialization and dwindling public services mean that discontent is highest in smaller towns cut off from the economic opportunities of bigger cities.

In towns of 5,000-10,000 people, 21 percent report below average life satisfaction compared to 14 percent in the capital Paris, INSEE said in a study this week.

(Reporting by Leigh Thomas; editing by David Clarke)

France tells Iran to stop ballistic missile work designed for nuclear weapons

FILE PHOTO: A boy holding a placard with pictures of (L-R) President Hassan Rouhani, the late founder of the Islamic Revolution Ayatollah Ruhollah Khomeini, and Iran's Supreme Leader Ayatollah Ali Khamenei, poses for camera in front of a model of Simorgh satellite-carrier rocket during a ceremony marking the 37th anniversary of the Islamic Revolution, in Tehran February 11, 2016. REUTERS/Raheb Homavandi/TIMA/File Photo

PARIS (Reuters) – France on Friday called on Iran to immediately stop all activities linked to ballistic missiles that could carry nuclear weapons after Tehran said it could put two satellites into orbit in the coming weeks.

“France recalls that the Iranian missile program (does) not conform with U.N. Security Council Resolution 2231,” Foreign ministry spokeswoman Agnes von der Muhll told reporters in a daily briefing.

“It calls on Iran to immediately cease all ballistic missile-related activities designed to carry nuclear weapons, including tests using ballistic missile technology.”

Von der Muhll was responding to comments by President Hassan Rouhani on Thursday, who said two satellites would be sent into space using Iran-made missiles.

Tehran responded by telling France to avoid repeating “irresponsible and incorrect” claims about Tehran’s missile work that were made by countries that were against a 2015 deal reached between Iran and six major powers, Iranian state TV reported on Friday.

“Iran’s home-grown defensive missile program is the Iranian nation’s natural right,” Iranian Foreign Ministry spokesman Bahram Qasemi was quoted as saying by TV.

“Iran’s missile program is not in violation of U.N. resolution of 2231.”

(Reporting by Parisa Hafezi in Dubai and John Irish in Paris editing by William Maclean)

Death toll in French ‘yellow vest’ protests rises to nine

FILE PHOTO: French Interior Minister Christophe Castaner attends a ceremony at the Police Prefecture in Paris, France, December 20, 2018. REUTERS/Benoit Tessier/File Photo

PARIS (Reuters) – The death toll linked to France’s anti-government “yellow vest” protests has risen to nine, the government said on Thursday, as demonstrators kept up major disruptions of road traffic.

“There has been a ninth death, this morning in Agen, by a roundabout. It was a ‘Yellow Vest’ who was protesting outside but was not following roadway safety instructions,” Interior Minister Christophe Castaner told reporters.

Local officials said the latest victim, a man, aged about 60, was hit by a truck near a motorway where demonstrators had been gathering.

Most of the nine deaths have occurred as a result of road accidents since protesters have been blocking off roundabouts and damaging motorway toll booths.

The “gilets jaunes” (yellow vest) protesters – named after the high-visibility jackets French motorists must carry in their cars – launched their demonstration in mid-November to rally against fuel tax increases.

But the movement has since evolved into a wider backlash against the economic reforms of President Emmanuel Macron, and protests in Paris this month were marred by major outbreaks of violence and vandalism.

(Reporting by Julie Carriat; Editing by Sudip Kar-Gupta/Inti Landauro and Mark Heinrich)

French police prepare for fifth wave of yellow vest protests

A protester wearing a yellow vest holds a French flag as the authorities dismantle their shelter at a traffic island near the A2 Paris-Brussels motorway in Fontaine-Notre-Dame, France, December 14, 2018. REUTERS/Pascal Rossignol

PARIS (Reuters) – France will deploy tens of thousands of police nationwide and around 8,000 in Paris on Saturday to handle a fifth weekend of ‘yellow vest’ protests, although the movement appears to be losing steam after concessions by President Emmanuel Macron.

The chief of police in Paris said concerns remained about violent groups infiltrating the protests. Anti-riot officers will protect landmarks such as the Arc de Triomphe and prevent people from getting close to the presidential palace.

“We need to be prepared for worst-case scenarios,” police chief Michel Delpuech told RTL radio.

He expected businesses in the capital to be less affected this weekend after heavy disruption over the past three weeks when major stores shut, hotels suffered cancellations and tourists stayed away during the usually busy run-up to Christmas.

Nicknamed “Acte V” of the protests, the yellow vest demonstrators will take to the streets this weekend as France recovers from an unrelated attack on a Christmas market in the eastern city of Strasbourg on Tuesday when a gunman shot and killed three people and wounded several others.

Hundreds of police officers were redeployed to Strasbourg to search for the gunman, who was shot dead in an exchange of fire on Thursday evening.

Interior Minister Christophe Castaner said it was time for the yellow vests to scale down their protests and accept they had achieved their aims. Police officers also deserved a break, he added.

“I’d rather have the police force doing their real job, chasing criminals and combating the terrorism threat, instead of securing roundabouts where a few thousand people keep a lot of police busy,” he said.

TOLL ON THE ECONOMY

Attractions such as the Louvre museum and Opera Garnier will be open this weekend, as will luxury department stores like Galeries Lafayette and Printemps. Last Saturday they were closed as thousands of sometimes violent protesters tore through the city. The previous weekend the Arc de Triomphe was vandalized, cars were overturned and torched and businesses smashed up.

The protests have taken a toll on the economy, with output in the last quarter of the year set to be half initial projections, while Macron’s concessions are likely to push the budget deficit above an EU agreed limit.

The yellow vest movement, which began as a protest against fuel taxes and then grew into an anti-Macron alliance, appears to have calmed since the president announced a series of measures to help the working poor.

However, many people wearing the high-visibility motorists’ safety jackets which are the symbol of the protests were manning barricades outside cities on Friday.

After heavy criticism for not being seen to respond to the protesters’ complaints, Macron made a TV address this week during which he said he understood their concerns and acknowledged the need for a different approach.

As well as canceling fuel tax increases that were due to kick in next month, Macron said he would increase the minimum wage by 100 euros a month from January and reduce taxes for poorer pensioners, among other measures.

Since the first yellow vest protests on Nov. 17, supporters have kept up a steady stream of dissent, although the numbers joining marches have steadily fallen.

(Reporting by Inti Landauro; editing by Luke Baker and David Stamp)

Strasbourg reopens Christmas market after attacker shot dead

A man dressed as Father Christmas poses with a tourist outside the Cathedral in Strasbourg, France, December 14, 2018. REUTERS/Christian Hartmann

By Gilbert Reilhac

STRASBOURG, France (Reuters) – Strasbourg reopened its traditional Christmas market under heavy security on Friday, the morning after French police shot dead a gunman suspected of killing four people in the heart of the historic city.

Cherif Chekatt, 29, was killed in the Neudorf neighborhood of Strasbourg after firing on police, ending a two-day manhunt that involved more than 700 members of the security forces.

The attack on Strasbourg’s cherished Christmas market, a target full of religious symbolism, evoked France’s difficulties in integrating western Europe’s largest Muslim minority and dealing with homegrown militants inspired by Islamic State.

“It’s reopening just in time,” said stall-holder Bernard Kuntz, preparing his scarves and stoles imported from India ahead of the expected arrival of French Interior Minister Christophe Castaner, who was expected to speak.

“We were getting worried. Some of the guys have taken out loans to be here, and we’ve already lost two days.”

On Friday, a fourth victim died as a result of the wounds they received in what Strasbourg Mayor Roland Ries said was indisputably an act of terrorism.

Ries expressed relief that Chekatt had been killed and said everyone in Strasbourg, on eastern France’s Rhine river border with Germany, felt the same.

French troops, who have been used to bolster national security since a wave of Islamic State-inspired attacks began in France in 2015, stood guard at the open-air market.

“I think it will help to get back to a life that I would describe as normal,” Ries told reporters after the news that Chekatt had been killed. “With the death of this terrorist … citizens, like me, are relieved.”

EXTRA 1,800 TROOPS ON MARKET PATROLS

Islamic State (IS) claimed Chekatt as one of its soldiers, saying he “carried out the operation in response to calls for citizens of coalition countries” fighting the militant group.

IS provided no evidence for the claim and Castaner called it “opportunistic”.

“Nothing indicates that (Chekatt) was part of a network. There is nothing to suggest that he was being protected by such, but the investigation is not yet over,” Castaner told Europe 1.

He described Chekatt as a long-time delinquent whose Islamic beliefs were radicalized during previous periods in prison. Police were still interrogating seven associates on Friday, including his parents, to determine whether he had accomplices.

France ramped up its security threat to its highest level after Chekatt struck late on Tuesday. Prime Minister Edouard Philippe promised an extra 1,800 troops would be put on patrols with a special focus on Christmas markets.

The outdoor market in Strasbourg, centered around a towering Christmas Tree in Place Kleber, draws more than 2 million visitors each year. Christmas markets have been a feature of the Alsatian city since the early 15th century.

The Strasbourg shooting was the latest in a succession of attacks linked to Islamist militancy in France going back to 2012. Since January 2015, more than 240 people have been killed in attacks on French soil, most of them in 2015-16.

(Reporting by Gilbert Reilhac in Strasbourg and Emmanuel Jarry and John Irish in Paris; Writing by Richard Lough; Editing by Mark Heinrich)

Police hunt through eastern France for Strasbourg Christmas market attacker

French soldiers patrol past the traditional Christmas market in Nice, France, December 12, 2018. REUTERS/Eric Gaillard

By Vincent Kessler and John Irish

STRASBOURG, France (Reuters) – Police searched through eastern France on Wednesday for a man suspected of killing at least two people in a gun attack on a Christmas market in Strasbourg and who was known to have been religiously radicalized while in jail.

Witnesses told investigators the assailant cried out “Allahu Akbar” (God is Greater) as he launched his attack on the market, the Paris prosecutor said.

The prosecutor, Remy Heitz, also suggested the suspect may have chosen his target for its religious symbolism.

“Considering the target, his way of operating, his profile and the testimonies of those who heard him yell ‘Allahu Akbar’, the anti-terrorist police has been called into action,” Heitz told a news conference.

Police identified the suspect as Strasbourg-born Cherif Chekatt, 29, who is on an intelligence services watch list as a potential security risk.

An investigation had been opened into alleged murder with terrorist intent and suspected ties to terrorist networks with intent to commit crimes, Heitz said.

Two people were killed and a third person was brain-dead and being kept alive on life support, he said. Six other victims were fighting for their lives.

France raised its security threat to the highest alert level, strengthening controls on its border with Germany as elite commandos backed by helicopters hunted for the suspect.

French and German agents checked vehicles and public transport crossing the Rhine river, along which the Franco-German frontier runs, backing up traffic in both directions. Hundreds of French troops and police were taking part in the manhunt.

Deputy Interior Minister Laurent Nunez said he could not rule out that the fugitive had already crossed the frontier.

SERIAL CONVICT

The gunman struck at about 1900 GMT on Tuesday, just as the picturesque Christmas market in the historic city was shutting down.

He engaged in two gunfights with security forces as he evaded a police dragnet and bragged about his acts to the driver of a taxi that he commandeered, prosecutor Heitz said.

No one has yet claimed responsibility, but the U.S.-based Site intelligence group, which monitors jihadist websites, said Islamic State supporters were celebrating.

French and German security officials painted a portrait of Chekatt as a serial law-breaker who had racked up more than two dozen convictions in France, Germany and Switzerland and served time in prison.

“It was during these spells in jail that we detected a radicalization in his religious practices. But we there were never signs he was preparing an attack,” Minister Nunez said.

One German security source said the suspect was jailed in southern Germany from August 2016 to February 2017 for aggravated theft but was released before the end of his 27-month sentence so that he could be deported to France.

“He was banned from re-entering Germany at the same time”, the security source in the state of Baden-Wuerttemberg said. “We don’t have any knowledge of any kind of radicalization.”

BORDER CONTROLS

The attack took place at a testing time for President Emmanuel Macron, who is struggling to quell a month-long public revolt over high living costs that has spurred the worst public unrest in central Paris since the 1968 student riots.

The revelation that Chekatt was on a security watchlist will raise questions over possible intelligence failures, though some 26,000 individuals suspected of posing a security risk to France are on the “S File” list.

Of these, about 10,000 are believed to have been radicalized, sometimes in fundamentalist Salafist Muslim mosques, in jail or abroad.

Police had raided the suspect’s home early on Tuesday in connection with a homicide investigation. Five people were detained and under interrogation as part of that investigation.

At the Europa Bridge, the main border crossing in the region used by commuters traveling in both directions, armed police inspected vehicles. Police were also checking pedestrians and trains arriving in Germany from Strasbourg.

“We don’t know where the attacker is and we want to prevent him from entering Germany,” a spokeswoman for the German border police Bundespolizei said.

French Justice Minister Nicole Belloubet said there was no need for the government to declare a state of emergency.

Secular France has for years grappled with how to respond to both homegrown jihadists and foreign militants following attacks in Paris, Nice, Marseille and beyond.

In 2016, a truck plowed into a Bastille Day crowd in Nice, killing more than 80 people. In November 2015, coordinated Islamist militant attacks on the Bataclan concert hall and other sites in Paris claimed about 130 lives.

There have also been attacks in Paris on police on the Champs-Elysees avenue, the offices of satirical weekly publication Charlie Hebdo and a kosher store.

A man drove a trunk into a crowd at a Christmas market in Berlin in December 2016, killing 12 people.

(Reporting by Vincent Kessler, Geert De Clercq, Sophie Louet, Sudip Kar-Gupta, Emmanuel Jarry and Richard Lough in Paris, Vincent Kessler and Gilbert Reilhac in Strasbourg, Sabine Siebold and Andrea Shalal in Berlin; Writing by Richard Lough; Editing by Angus MacSwan)

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 December 10, 2018. Ludovic Marin/Pool via REUTERS

By Michel Rose and John Irish

PARIS (Reuters) – President Emmanuel Macron on Monday announced wage rises for the poorest workers and tax cuts for pensioners in further concessions meant to defuse weeks of often violent protests that have challenged his authority.

In his first national address following two weekends of France’s worst unrest for years, Macron sought to restore calm and struck a humble tone after accusations that his governing style and economic policies were fracturing the country.

But he refused to reinstate a wealth tax and to back down on his reform agenda, which he said would proceed in 2019 with overhauls of pensions, unemployment benefits and public expenditures.

“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 in the 13-minute TV address from the Elysee Palace.

Protesters wearing yellow vests watch French President Emmanuel Macron on a computer screen in Sainte-Eulalie, France, December 10, 2018. REUTERS/Regis Duvignau

Protesters wearing yellow vests watch French President Emmanuel Macron on a computer screen in Sainte-Eulalie, France, December 10, 2018. REUTERS/Regis Duvignau

His response came 48 hours after protesters fought street battles with riot police, torching cars and looting shops – the fourth weekend of protests for the so-called “yellow vest” movement which started as a revolt against high fuel costs.

In measures that are likely to cost billions to state coffers, Macron said people on the minimum wage would see their salaries rise by 100 euros a month in 2019 without extra costs to employers.

His labor minister said this would be achieved by the government topping up small salaries.

Pensioners earning less than 2,000 euros will see this year’s 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.”

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

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

The 40-year old former investment banker was also under pressure to make amends about cutting remarks he made in the past year and a half that critics said 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,” he 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”, criticized Macron’s response as insufficient.

“Emmanuel Macron thought he could hand out some cash to calm the citizen’s insurrection that has erupted,” Jean-Luc Melenchon, leader of the far-left La France Insoumise, said.

“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.

 

(Additional reporting by Geert de Clercq, Caroline Pailliez, Richard Lough, Leigh Thomas, Pascale Denis, Jean-Baptiste Vey, Marine Pennetier in Paris and Dhara Ranasinghe in London, Editing by Mark Heinrich)

Macron administration warns of ‘great violence’ in Paris from hard core ‘yellow vests’

Trash bins burn as youths and high-school students clash with police during a demonstration against the French government's reform plan in Marseille, France, December 6, 2018. REUTERS/Jean-Paul Pelissier

By Richard Lough and Marine Pennetier

PARIS (Reuters) – French authorities warned another wave of “great violence” and rioting could be unleashed in Paris this weekend by a hardcore of ‘yellow vest’ protesters, as senior ministers sought to defuse public anger with conciliatory languages on taxes.

Despite capitulating this week over plans for higher fuel taxes that inspired the nationwide revolt, President Emmanuel Macron has struggled to quell the anger that led to the worst street unrest in central Paris since 1968.

Rioters torched cars, vandalized cafes, looted shops and sprayed anti-Macron graffiti across some of Paris’s most affluent districts, even defacing the Arc de Triomphe. Scores of people were hurt and hundreds arrested in battles with police.

French police stand guard as youth and high school students burn a trash container during a protest against the French government's reform plan, in Bordeaux, France, December 6, 2018. REUTERS/Regis Duvignau

French police stand guard as youth and high school students burn a trash container during a protest against the French government’s reform plan, in Bordeaux, France, December 6, 2018. REUTERS/Regis Duvignau

An official in Macron’s office said intelligence suggested that some protesters would come to the capital this Saturday “to vandalize and to kill.”

Prime Minister Edouard Philippe said 65,000 security personnel would be deployed across the country on that day to keep the peace.

In a bid to defuse the three-week crisis, Philippe had told parliament late on Wednesday that he was scrapping the fuel-tax increases planned for 2019, having announced a six-month suspension the day before.

Finance Minister Bruno Le Maire told a conference he was prepared to bring forward tax-cutting plans and that he wanted workers’ bonuses to be tax-free.

But he added: “In this case, it must go hand-in-hand with a decrease in spending.”

He also said France would impose a tax on big internet firms in 2019 if there was no consensus on a European Union-wide levy, seeking to appeal to the “yellow vests'” anti-business sentiment.

SOCCER MATCHES CANCELED

The threat of more violence poses a security nightmare for the authorities, who make a distinction between peaceful ‘yellow vest’ protesters and violent groups, anarchists and looters from the deprived suburbs who they say have infiltrated the movement.

On Facebook groups and across social media, the yellow vests are calling for an “Act IV”, a reference to what would be a fourth weekend of disorder.

“France is fed up!! We will be there in bigger numbers, stronger, standing up for French people. Meet in Paris on Dec. 8,” read one group’s banner.

Education Minister Jean-Michel Blanquer urged people to stay at home during the coming weekend. Security sources said the government was considering using troops currently deployed on anti-terrorism patrols to protect public buildings.

Several top-league soccer matches on Saturday have been canceled and the Louvre museum said it and others were awaiting word from Paris officials on whether to close their doors.

The protests, named after the fluorescent jackets French motorists are required to keep in their cars, erupted in November over the squeeze on household budgets caused by fuel taxes. Demonstrations swiftly grew into a broad, sometimes-violent rebellion against Macron, with no formal leader.

Their demands are diverse and include lower taxes, higher salaries and Macron’s resignation.

France’s hard-left CGT trade union on Thursday called on its energy industry workers to walk out for a 48 hours from Dec. 13, saying it wanted to join forces with the yellow vests. The movement, with no formal leader, has so far not associated itself with any political party or trade union.

A French riot policeman stands next to a burning car as youth and high school students protest against the French government's reform plan, in Nantes, France, December 6, 2018. REUTERS/Stephane Mahe

A French riot policeman stands next to a burning car as youth and high school students protest against the French government’s reform plan, in Nantes, France, December 6, 2018. REUTERS/Stephane Mahe

STREET POLITICS

The fuel-tax volte-face was the first major U-turn of Macron’s 18-month presidency.

The unrest has exposed the deep-seated resentment among non-city dwellers that Macron is out-of-touch with the hard-pressed middle class and blue-collar laborers. They see the 40-year-old former investment banker as closer to big business.

Trouble is also brewing elsewhere for Macron. Teenage students on Thursday blocked access to more than 200 high schools across the country, burning garbage bins and setting alight a car in the western city of Nantes.

Meanwhile, farmers who have long complained that retailers are squeezing their margins and are furious over a delay to the planned rise in minimum food prices, and truckers are threatening to strike from Sunday.

Le Maire said France was no longer spared from the wave of populism that has swept across Europe.

“It’s only that in France, it’s not manifesting itself at the ballot box, but in the streets.”

(Reporting by Richard Lough and Marine Pennetier; additional reporting by Leigh Thomas, Michel Rose and Myriam Rivet; Editing by Toby Chopra)

France dangles wealth tax review as ‘yellow vest’ anger persists

A protester wearing a yellow vest, the symbol of a French drivers' protest against higher diesel fuel prices, holds a flag near burning debris at the approach to the A2 Paris-Brussels Motorway, in Fontaine-Notre-Dame, France, December 4, 2018. REUTERS/Pascal Rossignol

By Sudip Kar-Gupta and Richard Lough

PARIS (Reuters) – President Emmanuel Macron could amend a wealth tax that critics say goes too easy on the rich, his government indicated on Wednesday, a day after suspending further fuel-tax hikes in the face of protests across France over living costs.

The Macron administration is struggling to defuse the anger driving the “yellow vest” protests, as it reels from the worst riots seen in central Paris in five decades last Saturday.

Government spokesman Benjamin Griveaux said all tax-related policies needed to be periodically evaluated and, if deemed not to be working, should be changed. He said the wealth tax could be reassessed in the autumn of 2019.

“If a measure that we have taken, which is costing the public money, turns out not to be working, if it’s not going well, we’re not stupid – we would change it,” Griveaux told RTL radio.

The unrest over the squeeze on household budgets comes as OECD data showed that France has become the most highly taxed country in the developed world, surpassing even high-tax Denmark.

Griveaux later told a weekly news conference that Macron had called on all political parties, trade unions and business leaders to press the need for calm.

Student protests and planned trade union strikes in the energy and port sectors next week underscored the risk of contagion.

A Macron aide denied that any eventual revision of the wealth tax would represent a major climb-down by Macron, a pro-business former investment banker, adding that the president remained committed to his reform drive.

Griveaux defended Macron’s decision last year to narrow the wealth tax – known in France as “ISF” – to a tax on real estate assets, rather than all of an individual’s worldwide assets, from jewelry to yachts to investments, over the value of 1.3 million euros ($1.5 million).

Those changes earned Macron the label “president of the rich” among the hard-pressed middle-class voters and blue-collar workers who criticize the president for pursuing policies that favor the wealthy and do nothing to help the poor.

Griveaux said the wealth tax reform had not been “a gift to the rich” and was aimed at encouraging wealthy individuals to invest more in France.

“This money was to be invested in our SMEs for them to develop, innovate and hire. If that is not the case … then we can reopen it for discussion.”

U-TURN

The “yellow vest” movement – so-called because of the high-vis jackets worn by protesters – began with the aim of highlighting the squeeze on household budgets caused by fuel taxes but morphed into a broader, sometimes-violent rebellion against 40-year-old Macron.

His administration’s shift on fuel tax came after rioters ran amok in central Paris, torching cars, looting boutiques vandalizing cafes and private residences and cafes in affluent neighborhoods.

Prime Minister Edouard Philippe said the six-month suspension to the carbon tax would be used to examine other measures to bolster household spending power.

It marked the first major U-turn by Macron in his 18-months in office, at a time polls show that barely one in five French people think he is doing a good job.

U.S. President Donald Trump appeared to mock Macron over the policy shift, which could make it harder for France to meet its CO2 emissions reduction target, a core element of the Paris climate agreement of 2015.

“I am glad that my friend @EmmanuelMacron and the protestors in Paris have agreed with the conclusion I reached two years ago,” Trump tweeted late on Tuesday, as U.N. climate talks take place in Poland.

“The Paris Agreement is fatally flawed because it raises the price of energy for responsible countries while whitewashing some of the worst polluters.”

Adding to Macron’s difficulties, college students are agitating and the hardline CGT trade union on Wednesday called for strikes in the energy industry and at ports on Dec. 13.

“We too want a freeze on the planned closures of coal plants,” the CGT union said in a statement.

Meanwhile, Total said a rising number of its filling stations were running dry as a result of “yellow vest” roadblocks.

(Reporting by Sudip Kar-Gupta, Richard Lough and Sophie Louet; Writing by Luke Baker and Richard Lough; Editing by Toby Chopra and Alison Williams)

Macron tells PM to hold talks after worst unrest in Paris for decades

Burned cars are seen on avenue Kleber after clashes with protesters wearing yellow vests, a symbol of a French drivers' protest against higher diesel taxes, in Paris, France, December 1, 2018. REUTERS/Charles Platiau

By Jean-Baptiste Vey and John Irish

PARIS (Reuters) – French President Emmanuel Macron ordered his prime minister on Sunday to hold talks with political leaders and demonstrators, as he sought a way out of nationwide protests after rioters turned central Paris into a battle zone.

Riot police on Saturday were overwhelmed as protesters ran amok in Paris’s wealthiest neighborhoods, torching dozens of cars, looting boutiques and smashing up luxury private homes and cafes in the worst disturbances the capital has seen since 1968.

Firemen extinguish burning cars set afire by protesters wearing yellow vests, a symbol of a French drivers' protest against higher diesel fuel taxes, during clashes near the Place de l'Etoile in Paris, France, December 1, 2018. REUTERS/Stephane Mahe

Firemen extinguish burning cars set afire by protesters wearing yellow vests, a symbol of a French drivers’ protest against higher diesel fuel taxes, during clashes near the Place de l’Etoile in Paris, France, December 1, 2018. REUTERS/Stephane Mahe

The unrest began as a backlash against fuel tax hikes but has spread. It poses the most formidable challenge yet to Macron’s presidency, with the escalating violence and depth of public anger against his economic reforms catching the 40-year-old leader off-guard and battling to regain control.

After a meeting with members of his government on Sunday, the French presidency said in a statement that the president had asked his interior minister to prepare security forces for future protests and his prime minister to hold talks with political party leaders and representatives of the protesters.

A French presidential source said Macron would not speak to the nation on Sunday despite calls for him to offer immediate concessions to demonstrators, and said the idea of imposing a state of emergency had not been discussed.

Arriving back from the G20 summit in Argentina, Macron had earlier rushed to the Arc de Triomphe, a revered monument and epicenter of Saturday’s clashes, where protesters had scrawled “Macron resign” and “The yellow vests will triumph”.

The “yellow vest” rebellion erupted out of nowhere on Nov. 17, with protesters blocking roads across France and impeding access to some shopping malls, fuel depots and airports. Violent groups from the far right and far left as well as youths from the suburbs infiltrated Saturday’s protests, the authorities said.

Government spokesman Benjamin Griveaux had indicated the Macron administration was considering imposing a state of emergency. The president was open to dialogue, he said, but would not reverse policy reforms.

“We won’t change course. We are certain of that,” he told Europe 1 radio.

As he spoke, workmen in the upper-crust district of central Paris set about cleaning the defaced Arc, removing charred hulks of cars and replacing the shattered windows of banks, restaurants and glitzy boutiques.

Workmen place a metal panel on the window of a vandalized bank the morning after clashes with protesters wearing yellow vests, a symbol of a French drivers' protest against higher diesel fuel taxes, in Paris, France, December 2, 2018. REUTERS/Stephane Mahe

Workmen place a metal panel on the window of a vandalized bank the morning after clashes with protesters wearing yellow vests, a symbol of a French drivers’ protest against higher diesel fuel taxes, in Paris, France, December 2, 2018. REUTERS/Stephane Mahe

MACRON UNYIELDING

While the protests were initially against Macron’s fuel tax hikes – necessary he says to combat climate change – they have also mined a vein of deep dissatisfaction felt toward his liberal reforms, which many voters feel favor the wealthy and big business.

Police said they had arrested more than 400 people in Paris on Saturday and that 133 were injured. Some 10,000 tear gas canisters and stun grenades were fired as well as water cannon as security forces fought for control.

Macron’s plight illustrates a conundrum: How do political leaders’ introduce policies that will do long-term good for the environment without inflicting extra costs on voters that may damage their chances of re-election?

His unyielding response has exposed him to charges of being out of touch with common folk outside of France’s big cities who worry about the squeeze on household budgets and job security.

The protests have driven Macron’s popularity to record lows and left him facing a lose-lose situation, said Gael Sliman, president of the Odoxa polling institute said.

Either Macron caves into the pressure and is derided by opponents as weak, or he puts down the dissent, Sliman said.

“In the second scenario, Macron will still come out the loser, because what everyone will remember is that he wrestled with the popular classes. He would be victorious but at the cost of having crushed them.”

Before heading into Sunday’s meeting, Macron met under heavy security with police and firefighters near the Champs Elysees boulevard. Some bystanders cheered, others jeered and called on him to resign.

So too did Jean-Luc Melenchon, head of hard-left party La France Insoumise (France Unbowed) and far-right leader Marine Le Pen, who both demanded the government unwind its fuel tax hikes. They called for parliament to be dissolved and snap elections held.

Damaged vehicles are seen on avenue Kleber after clashes with protesters wearing yellow vests, a symbol of a French drivers' protest against higher diesel taxes, in Paris, France, December 1, 2018. REUTERS/Charles Platiau

Damaged vehicles are seen on avenue Kleber after clashes with protesters wearing yellow vests, a symbol of a French drivers’ protest against higher diesel taxes, in Paris, France, December 1, 2018. REUTERS/Charles Platiau

Such an outcome is unlikely, however. Macron has 3 1/2 years left of his five-year mandate and a strong majority in parliament, albeit with signs of simmering unease on the backbenches over his response to the protests.

TV footage showed the interior of the Arc ransacked, a statue of Marianne, symbol of the French Republic, smashed, and graffiti scrawled on the exterior ranging from anti-capitalist slogans to social demands and calls for Macron’s resignation.

On nearby streets, some Parisians worried of a repeat of the violence next weekend. The yellow vests have already called another demonstration in Paris.

“The violence is increasing at an exponential rate,” said Claude, a resident in the affluent 16th district. “The state is losing control, it is scary. They cannot let this happen. Maybe the army should intervene.”

(Reporting by John Irish, Richard Lough, Emmanuel Jarry, Sudip Kar-Gupta, Matthias Blamont, Myriam Rivet, Simon Carraud and Luke Baker; Writing by John Irish and Richard Lough; Editing by Mark Heinrich and Susan Fenton)