Date
11 December 2018
The domestic troubles facing French President Emmanuel Macron could be traced to his inability to jump-start the national economy. Photo: Bloomberg
The domestic troubles facing French President Emmanuel Macron could be traced to his inability to jump-start the national economy. Photo: Bloomberg

Macron’s troubles a wake-up call for centrist leaders

Over the past three weekends, the so-called “yellow vest” revolt has swept across France in protest against the recent fuel price hikes. Paris saw its worst street riots in 50 years last Saturday.

Despite the grave destruction caused by the rioters, the latest poll suggests that up to 77 percent of the French people actually think the yellow vest movement was “justified” in its actions.

So why are fuel prices shooting up in France?

It is a direct consequence of President Emmanuel Macron’s new environmental policy initiatives.

At present, over 60 percent of the vehicles on French roads are powered by diesel, and over the past year diesel prices have soared by 24 percent, with many French motorists already feeling the pinch.

To make things worse, the government recently announced that starting from January next year, a 7.6 and 3.9 percent carbon tax will be levied on diesel and gasoline respectively.

There are three reasons why Macron is determined to enforce fuel tax hikes.

First, he wanted to narrow the price gap between gasoline and diesel by imposing substantial tax on the latter in an attempt to curb consumption of the more polluting fuel.

Second, he wanted to encourage more motorists to switch to electric cars.

And third, Macron planned to divert the extra fuel tax revenue into promoting clean energy.

Unfortunately, the tax hikes proved highly unpopular, and many people believe the government is just using environmental protection as an excuse to boost tax revenues.

On the whole, the French economy has remained sluggish, with the unemployment rate standing at around 9 percent and people’s purchasing power continuing to weaken.

Worse still, Macron’s drastic amendment to the labor law has undermined the interests of many workers, while his decision to cut social welfare spending has deprived many people of their housing allowance.

These unpopular measures have led to mounting grievances from the public, and the recently proposed fuel tax hikes turned out to be the last straw.

Macron was swept to power by virtue of his centrist election pledges. In theory, as a centrist president, he is supposed to be capable of pleasing both the left and the right.

However, Macron’s inability to jump-start the national economy has alienated both the left and the right, and has also indirectly drawn the ultra-left and the ultra-right closer to form a “united front”.

The worsening political crisis facing Macron is a reminder for other centrist leaders around the world that, at the end of the day, the economy is the only thing that counts if they want to appease both ends of the political spectrum.

This article appeared in the Hong Kong Economic Journal on Dec 4

Translation by Alan Lee

[Chinese version 中文版]

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Hong Kong Economic Journal

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