French President Emmanuel Macron’s government on Tuesday 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 Mr. 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.
The new measures, including a €100 jump in the minimum wage next year, are expected to cost up to €11 billion ($12.5 billion) — 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 €4.5 billion.
The country’s deficit is likely to exceed the EU’s mandated 3% of GDP limit at least “temporarily,” Richard Ferrand, the Parliament president from Mr. Macron’s Republic on the Move party, told RTL radio.
Government spokesman 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 won’t weigh on firms’ finances since the increase will come via a higher monthly government top-up. Mr. Macron will also do away with payroll taxes on overtime hours, while scrapping a tax on pensioners earning less than €2,000 a month.