(Bloomberg Opinion) -- The sight of “yellow vest” protesters torching cars and smashing storefronts on some of the poshest avenues in Paris this month was a double-blow for the city’s Mayor Anne Hidalgo.
First, it was a clear hit to the image of Paris as a global magnet for talent, investment and technology. Hidalgo has spent much of the last two years talking up the French capital as a post-Brexit hub for bankers, leading the winning bid for the 2024 Olympics, and promoting women entrepreneurs in the tech sector. Now she’s more preoccupied with deploying anti-riot measures.
Second, the gilets jaunes strike at the heart of one of her most cherished campaigns: The fight against pollution and climate change. She has an ambition to ban diesel cars in 2024 and gasoline vehicles in 2030 as she tries to make Paris carbon-neutral by 2050.
One of the triggers of the protests was a planned increase in fuel taxes, especially diesel, in 2019. For the 20 percent of the population living on less than 1,800 euros ($2,052) per month who commute to work by car, it was a call to arms. While President Emmanuel Macron’s administration eventually backed down from these hikes, it was too late to avoid the link in many people’s minds between planet-friendly policies and the urban elites. It’s a phenomenon familiar to Trumpian America, hence the gloating from the U.S. president over Hidalgo and Macron’s difficulties.
And nowhere is more urban or elitist than Paris. It was therefore highly symbolic to see out-of-town protesters swarm into the capital and attack historic sights such as the Arc de Triomphe. On one side were people for whom cheap fuel is a lifeline to feeding their family. On the other was a mayor who has pedestrianized swathes of the city, embraced electric scooter startups, and for whom clean air is the real lifeline.
In Paris itself, there is obvious support for policies that make the city cleaner. There is increasing awareness of the dangers of air pollution, which Hidalgo says is the leading cause of mortality in France after alcohol and tobacco. Those ubiquitous scooters have been tested by tens of thousands of residents. Along with an increasing appetite for freelance work for gig-economy platforms, Paris feels very unlike France.
Yet if Paris doesn’t want to be the target of an enraged, put-upon population, it should also get behind the idea of making sure nobody gets left behind in the energy transition. Taxation is too blunt a tool, and Macron’s predecessor Francois Hollande had to back down too from taxes on heavy-goods vehicles in the face of protests. That doesn’t mean, though, that France can just keep making deficit-busting giveaways, as Macron did to the yellow vests. France has been borrowing its way out of crises for too long.
The best source of extra cash in French coffers is the state’s extravagant portfolio of assets. France likes to keep a tight rein on its biggest companies, often through large stakes, but it could probably maintain this while trimming back meaningfully. Privatizing some of these holdings would bring in billions. The Paris airports company, ADP, for example is valued at about 16 billion euros and half-owned by the government. Maybe Hidalgo’s city could be part of a national solution after all.
To contact the editor responsible for this story: James Boxell at jboxell@bloomberg.net
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Lionel Laurent is a Bloomberg Opinion columnist covering finance and markets. He previously worked at Reuters and Forbes.
©2018 Bloomberg L.P.