Emmanuel Macron

Macron Vows Tax Cuts, Pay Rise; Will France's Anger Subside?

It's a turning point in Macron's presidency, and a crucial moment for both France and Europe

French President Emmanuel Macron tried to reassert control over a nation wracked by increasingly violent protests with offers of tax relief for struggling workers and pensioners — and an exceptional admission Monday that "I might have hurt people with my words."

It may not be enough.

Even as Macron broke his silence on the protests in a brief televised address, yellow-vested demonstrators vowed to keep up the pressure on a man they see as arrogant, out-of-touch and "president of the rich."

"We are at a historic moment for our country," the French leader said from the presidential Elysee Palace. "We will not resume the normal course of our lives" after all that has happened.

Speaking with a soft voice and gentle tone, Macron pleaded for a return to calm after almost four weeks of protests that started in neglected provinces to oppose fuel tax increases and progressed to rioting in Paris and a plethora of broad demands.

It's a turning point in Macron's presidency, and a crucial moment for both France and Europe. Macron rode to the presidency last year on promises of rejuvenating France's stagnant economy and salvaging European unity. His credibility on both fronts is now deeply damaged, just as the EU struggles with Britain's chaotic exit and as France's protests have prompted copycat movements beyond its borders.

French protesters spent days demanding that Macron speak publicly about their concerns. After he did, they took to French airwaves and social media to dissect his promises.

"It doesn't solve the problem," a protester in a yellow vest, Alain Bouche, told BFM television from a yellow-vest roadblock southwest of Paris. He said fellow demonstrators want a national referendum, too.

Some protest representatives have said more demonstrations will be held Saturday, following those in Paris that turned violent during the previous two weekends.

Meanwhile, students opposing changes in key high school tests are calling for a new round of protests Tuesday.

Macron declared an "economic and social state of emergency," ordering the government and parliament to take immediate steps to change tax rules and other policies that hit the wallets of working class French people.

He responded to several of the protesters' demands, promising measures that included:

Now: France's minimum salary for a full-time job is 1,185 euros ($1,346). An increase of 21 euros ($23.80) was expected in January as part of an annual adjustment based on price inflation and others economic factors. In addition, a cut in payroll taxes was bringing another rise of 23 euros ($26).
Next year: Macron announced the minimum salary would go up by 100 euros per month through a government-funded increase at the beginning of 2019. He did not explain how it would be financed.

Now: Overtime applies to employees working more than 35 hours per week. Former President Nicolas Sarkozy implemented tax-free overtime hours, allowing employees to improve their salaries by working more. The policy was abolished under Macron's predecessor, Francois Hollande. Macron's government planned to reinstitute it in September 2019.
Next year: Macron confirmed that workers will no longer have to pay taxes on overtime pay starting next year, but didn't say what month. The president's office said the change would be implemented earlier than previously planned. 

Now: The French state is paying the country's poorest households a year-end bonus. The amount is about 150 euros ($170) for a single person.
Next year: Macron asked profit-making companies to give their employees tax-free bonuses at the end of 2019. He exempted businesses that are struggling. 

Now: French retirees had their pensions frozen this year, while a tax increase on some retirement earnings impacted about eight million pensioners. Macron explained that he preferred to have people still in the workforce benefit from tax cuts.
Next year: Macron withdrew the tax hike on pensions under 2,000 euros ($2,270), acknowledging it was a "too big" and "unjust" effort.

Now: The government already planned to cut housing and payroll taxes by 6 billion euros ($6.8 billion) next year.
Next year: Macron reaffirmed the plan.

Restore a special tax on households with assets above 1.3 million euros ($1.5 million) that he had slashed last year. Yellow vest protesters decry the end of the tax and wanted it revived.

Overall, Macron unveiled no radical changes, and clung to his vision for transforming France. Yet his costly promises will make it even more difficult to boost growth — already being hammered by protests that have damaged holiday retail sales and worried tourists and foreign investors.

"It's more of a budgetary adjustment than a change of political course," said Benjamin Cauchy, a yellow vest protest representative. "That doesn't correspond to what the French want."

Some protesters just wanted one thing: Macron to announce "I quit."

He showed no signs of giving in. Instead, he defended his political independence and described his devotion to serving France. No French presidential or parliamentary elections are scheduled until 2022.

The most remarkable part of the speech may have been the moment Macron said: "I take my share of responsibility" for the anger gripping France.

It was an unusual admission for a president whose leadership has appeared marked by a single-minded determination to push through reforms he promised in his 2017 campaign, regardless of the fallout.

"I might have hurt people with my words," he said.

Indeed, he wounded many when he told a jobless man he just had to "cross the street" to find work. Or when he told retirees with small pensions to stop complaining. Or when he suggested some French workers are "lazy."

However, the centrist leader insisted Monday that the protesters' "malaise" is as old as he is — 40 years — and coincides with France's struggles in recent decades to keep up with globalization.

And he denounced the protest-associated violence that led to hundreds of injuries, more than 1,000 arrests and the ransacking of stores in some of Paris' richest neighborhoods.

Authorities will show "no indulgence" to those behind the vandalism and rioting, Macron said, adding that "no anger justifies" attacking police or looting stores.

Political analyst Dominique Moisi said the important thing in Macron's speech was not only "what he said but the way he said it."

Macron sought to establish his authority by declaring he wouldn't tolerate violence, but also "gave the impression that he understood what is happening," Moisi said.

Moisi predicted the protest movement could fizzle as the holidays approach and the government launches into the public dialogue Macron promised. But that might be too little, too late.

Fallout from the protests so far could cost France 0.1 percent of gross domestic product in the last quarter of the year, French Finance Minister Le Maire warned Monday.

"That means fewer jobs, it means less prosperity for the whole country," he said.

The yellow vest protests began in November against a rise in fuel taxes — which Macron retreated from last week — but mushroomed into other, sometimes contradictory demands.

Before his TV speech, Macron met with local and national politicians and with union and business leaders to hear their concerns — but with no representatives of the scattered, leaderless protest movement.

Samuel Petrequin and Milos Krivokapic contributed.

Copyright AP - Associated Press
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