Why People in Yellow Vests Are Blocking French Roads

(Bloomberg) -- Men and woman known for the yellow vests they wear have protested across France since mid-November, sporadically blocking roads, fuel depots and warehouses, and presenting President Emmanuel Macron with perhaps his biggest domestic challenge yet. The disruptions led to double-digit declines in sales at large retailers over weekends in November and were partially responsible for sending consumer confidence in November to its lowest in three-and-a-half years. Scenes of burning vehicles and tear gas on the Champs Elysees were seen around the world, causing Finance Minister Bruno Le Maire to publicly bemoan the damage to the country’s reputation.

1. Who are these ‘Yellow Vests’?

They are protesters unhappy with a hike in gasoline and diesel taxes imposed by Macron’s government to curb carbon emissions, their yellow vests (“gilets jaunes”) a nod to the plight of motorists. (Drivers in France are required to carry at least one such safety vest in their cars.) What began as an online petition has become a grassroots movement with no real leadership, organized through social media and divided into local chapters carrying out local actions. At one point during the Nov. 17 “Day of Action,” police counted about 2,000 separate blockades thrown up around the country. Though political parties have eagerly tried to associate themselves with the movement, it claims to be completely non-political.

2. What’s the issue with gas taxes?

Macron’s government raised the hydrocarbon tax by 7.6 cents per liter on diesel and 3.9 cents on gasoline at the start of 2018; a second increase coming at the start of 2019 will add another 6.5 cents per liter of diesel and 2.9 cents per liter of gasoline. The government argues that most of the price increases felt by consumers in 2018 came from the rising market price of oil, over which it has no control, rather than the higher taxes. Though the initial online petition and protests were about taxes, the movement represents a broader anger about purchasing power.

3. Why the worry about purchasing power?

For many in France’s small towns and rural areas, who rely on cars and have seen public services dwindle, rising fuel prices are the final straw. Many of the local protest groups have called for higher pensions, cuts to politicians’ salaries and the restoration of a wealth tax that Macron ended last year. Some have gone so far as to call for the National Assembly to be dissolved and replaced by a “People’s Assembly.”

4. Why are these protests rattling France?

France’s unions, historically the source of popular protests, aren’t as formidable as they once were, and the last nationwide strike that really paralyzed the country was in 1995. The unions’ tight control over members allowed them to end strikes and demonstrations as quickly as they started them. With the Yellow Vests, the lack of central organization means there’s no one to negotiate with. And the movement shows no signs of running out of steam or moderating its demands. Organizers have called for demonstrations every Saturday in Paris. Polls show that more than three-quarters of the French support the protests, with approval rising in spite of the economic disruptions and sporadic violence. The Yellow Vests have taken some steps toward becoming more structured, with eight local spokesmen forming a national committee, but some local chapters have contested the move.

5. How has the government responded?

Ministers argued that payroll and poll tax cuts more than compensated for higher gas taxes. When that line didn’t convince, they promised more incentives to buy cleaner cars. They’ve criticized the Yellow Vests for wanting both lower taxes and more services and for the violence that’s flared at some of their protests. Presenting a national energy plan on Nov. 27, Macron said he’s heard the “deep anger” about rising costs but offered little in return except opening a “citizens debate” on ecology and making vague comments about “modulating” gasoline taxes if market prices keep rising. Subsequent polls showed more than three-quarters of the French weren’t convinced.

6. What’s the risk for Macron?

Officially, none. Though his popularity is in the tubes -- polling agencies put his approval rating at 25 to 30 percent -- he doesn’t face national elections until 2022. His bet was that by front-loading unpopular, but in his view necessary, labor and tax reforms, the benefits would become clear by the time he faced re-election. So far, that’s not happening.

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