High school students kneel in front of French riot police as they attend a demonstration to protest against the French government's reform plan, in Marseille, France, on December 11, 2018. Picture: REUTERS/JEAN-PAUL PELISSIER
High school students kneel in front of French riot police as they attend a demonstration to protest against the French government's reform plan, in Marseille, France, on December 11, 2018. Picture: REUTERS/JEAN-PAUL PELISSIER

Paris — President Emmanuel Macron’s government has defended a financial relief package to quell the "yellow-vest" revolt over taxes and living standards, hoping to end protests which have spiralled into violence in Paris and other cities.

Over 21-million people watched a visibly contrite Macron declare a “state of economic and social emergency” in a televised address on Monday, promising billions of euros in aid for the lowest earners.

It was a stark retreat for the 40-year-old former investment banker, who until now had vigorously argued his tax policies and economic reforms were the only way to prepare France for the challenges of the 21st century.

The new measures, including a €100 jump in the minimum wage in 2019, are expected to cost up to €11bn and are likely to put France on a collision course with Brussels.

The government had already scrapped fuel tax increases set for January — a core demand of the yellow vests — which will cost a further €4.5bn.

The country’s deficit is likely to exceed the EU’s mandated 3.0% of GDP limit at least temporarily, Richard Ferrand, the parliament president from Macron’s Republic on the Move party, told RTL radio.

Having a stable France is the priority as the protests expose deep social divisions while taking a heavy economic toll, Ferrand said, adding: “We can’t continue like this.”

Even so, the measures might not mollify enough protesters to call off road blockades and weekly demonstrations in Paris which have seen fierce clashes with police and extensive burning and looting over the past two Saturdays.

Although some yellow vests were open to Macron’s olive branches, others said they were not ready to call a halt to the protests.

"Initially I thought Macron had heard us at least a bit, but when you look at the details, he hasn’t at all," said Thomas Miralles, a yellow-vest spokesperson in the southern Pyrenees-Orientales department. “I’ll be in Paris on Saturday, for the first time,” he said.

The yellow-vest movement which erupted via social media in October has enjoyed broad public support, but recent surveys suggest it may be waning.

An OpinionWay poll for LCI television after Macron’s speech showed 54% wanting the yellow-vest protests to halt, compared with 46% in favour of further action.

Another poll, by Odoxa, found 54% in favour of continued protests —down from 66% on November 22 — and 46% opposing the movement.

Government spokesperson Benjamin Griveaux told BFM television that the minimum wage hike, including a planned inflation adjustment, would put an additional €125 in the pockets of millions of the lowest earners.

It will not weigh on firms’ finances since the increase will come via a higher monthly government top-up of €80 for low earners and a €20 reduction in payroll charges.

Macron will also do away with payroll taxes on overtime hours, while scrapping a tax on pensioners earning less than €2,000 a month.

Labour unions, which have largely been relegated to the sidelines during the antigovernment protests, gave a cool reception to Macron’s speech, not least his call for firms to pay a tax-free bonus to workers this Christmas, without making it obligatory.

Macron excluded the return of a wealth tax on high earners he abolished in 2017,a move which led to his unwanted reputation as a “president of the rich”, although he hinted that big firms would be tapped to help pay for the higher wages and pensions.

His ratings have sunk, with a recent poll showing just 23% approved his actions.

“I know that I have hurt some of you with my statements,” Macron said, alluding to comments seen as dismissive of the plight of many who live outside the big cities.

In one instance, he told an unemployed gardener that all he had to do to find work was to cross the street where restaurants, cafes or construction firms were hiring.

Some protesters were quick to dismiss Macron's loosening of government purse strings, vowing to hold a fifth straight Saturday of protests in the capital this weekend.

"It's just window dressing for the media, some trivial measures, it almost seems like a provocation," said Thierry, a 55-year-old bicycle mechanic at a roundabout blockade in the southern town of Le Boulou.

AFP