What’s driving the unrest?
The protests mostly center on gas prices, particularly diesel. French motorists mostly own diesel-powered vehicles, and diesel prices have risen sharply. The blame, motorists say, lies with government policies that took effect at the beginning of 2018 and impose an additional 7.6 cents in taxes for each liter of diesel purchased. Data from the European Commission shows France’s tax on the fuel — estimated to be around 59 percent — is one of the highest in the European Union.
Motorists, particularly in rural and outer suburban areas, are also upset with the French government for cutting speed limits on local roads. That policy, which took effect July 1, requires that motorists slow down on France’s “secondary network” — over 400,000 kilometers of two-way, one-lane-each-way roads. A survey found over 70 percent of respondents opposed the move, with one noting that drivers “should not become the cash cows of the state.”
How has the government responded?
French President Emmanuel Macron says tax hikes on gas are needed to wean the Republic off environment-polluting fossil fuels. In an October interview with regional newspapers, Macron noted: “I prefer taxing fuel to taxing labor. People complaining about rising gas prices are the same ones who complain about pollution and how their children suffer.” His administration also justifies the new speed limits, citing the “terrifying human cost” of road accidents. France ranks in the middle of the E.U. pack in numbers of road deaths, and studies show that speed limits help curb road fatalities.
Macron initially said that despite the protests, he will not change course. “I understand the impatience. I hear the anger. We are in the middle of a profound transformation of our society, which touches our work, our consumption and our ways of transport. We are making courageous choices to succeed,” he noted on Twitter. The French president also promised to come down hard on violent protesters, saying they will be “identified and held accountable for their actions before the courts.”
“I will always respect protest, I will always listen to opponents, but I will never accept violence,” he continued.
How have businesses reacted?
As violence escalated over the weekend, the famed Galeries Lafayette, an upmarket French department store, was forced to evacuate customers. Some of its competitors followed suit. The French Federation for Commerce and Distribution, which represents the interests of retail and wholesale brands, said in a statement: “The consequences are particularly hard for our customers who can’t do their holiday shopping, for our suppliers who can’t deliver goods, and for our employees who are barred from working and risk financial damage. The future of our shops and workers is at stake.”
The unrest comes at an important time for French businesses. A significant part of annual sales occurs in the lead-up to Christmas, and France ranks near the top when it comes to retail turnover during the holidays. Those sales help boost businesses’ balance sheets in a weak economy. However, according to government officials, the protests have hit businesses hard with revenue across some sectors falling by up to 50 percent. The impact is, according to French Finance Minister Bruno Le Maire, “severe and ongoing.”
What happens next?
On Tuesday, the government announced a temporary suspension of fuel tax increases. A broader consultation on spending programs will also be held in a bid to quell public anger. However, Macron is walking a political tightrope. While the protests were originally about his road policies, they have come to reflect the deep distrust some feel toward a president they see as favoring the rich and powerful. Whether these concerns are tempered by Macron’s concessions remains unknown.
The last time riots gripped France was in 2005. Back then, the death of two young boys in a poor Paris suburb sparked weeks of social unrest. In the aftermath, politicians — including then-President Jacques Chirac — promised to work harder at bridging the divide between the rich and poor. “Whatever our origins, we are all the children of the (French) republic, and we can all expect the same rights,” Chirac said. Macron’s political future may depend on whether he can convince voters he is committed to doing just that.
Ashley Nunes studies regulatory policy at MIT’s Center for Transportation & Logistics.