Why People in Yellow Vests Are Blocking French Roads

(Bloomberg) -- What started in November as a grassroots movement against plans to hike gas taxes has spiraled into widespread anger about the rising cost of living and discontent with French President Emmanuel Macron. Weekly Saturday demonstrations have attracted more than 100,000 people and at times turned violent, tarnishing France’s reputation with images of torched cars, tear gas and rioters defacing the Arc de Triomphe. Outrage has been fueled by criticism that Macron, the youngest French leader since Napoleon, is out of touch with average people, his policies favoring the rich. After scrapping the fuel tax failed to bring calm, he faces a political crisis and economic quandary in how to respond to a growing list of sometimes contradictory demands.

1. What sparked the protests?

The initial discontent focused on plans to raise hydrocarbon taxes to curb emissions and fund incentives for cleaner cars and home-heating systems. The hikes, after increases at the start of 2018, were set to take effect on Jan. 1, adding 6.5 cents per liter on diesel and 2.9 cents on gasoline. For many in France’s small towns and rural areas, who rely on cars and have seen public services dwindle, rising fuel prices were the final straw. An online petition grew into a grassroots movement organized through social media and divided into local chapters carrying out local actions. They named themselves after the “gilets jaunes,” or reflective yellow safety vests, that French motorists are required to carry in their cars in case of an emergency. Demands by the loosely affiliated protesters have expanded from there.

2. What do protesters want now?

Demands include increasing retirees’ pensions, raising the minimum wage, cutting politicians’ salaries and restoring the wealth tax, which Macron watered down in an effort to keep and attract entrepreneurs to France. There have even been calls for Macron to resign and replace the National Assembly, the lower house of parliament, with a “people’s council.” Polls have shown that three-quarters of the French support their demands, even if they also disapprove of the violence that’s accompanied many of the protests. Other groups have joined in, taking advantage of the fraught atmosphere to fight for their own, unrelated causes, including high school students, ambulance drivers and farmers -- many in opposition to Macron’s policies, which are seen as too favorable to businesses and the wealthy.

3. How has the government responded?

At first it sought to dismiss the movement, with ministers pointing out its contradictory demands, then trying to emphasize its violent fringe. Macron himself never mentioned it until Dec. 1, when, speaking from the Group of 20 summit in Buenos Aires after the most violent of the Saturday protests, he said the scenes of chaos weren’t the “pacific representation of a legitimate anger.” Three days later, the government suspended the fuel tax for six months, before scrapping it altogether. When blockades and roadblocks continued after that, and another Saturday protest saw an estimated 138,000 people take to the streets across France, Macron held a series of meetings with unions and local government officials. In a much-anticipated Dec. 10 address to the nation, he recognized "the anger of the Yellow Vests" and outlined a series of measures to increase purchasing power.

4. Why are these protests rattling France?

Because the Yellow Vests lack a central organization, meaning there’s no one to negotiate with. The movement’s violent fringe, at one point, even issued death threats to members who tried to start talks with the government. And the movement shows no signs of running out of steam or moderating its demands. In the past, France’s unions, historically the source of popular protests, had tight control over members allowing them to end strikes and demonstrations as quickly as they started them. Now the unions aren’t as formidable as they once were, and the last nationwide strike that really paralyzed the country was in 1995. 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. The labor unions themselves have been grappling with how to become involved with the Yellow Vest protests.

5. What’s the cost to France?

Coming right at the crucial holiday shopping and tourist season, the Yellow Vest protests have crushed hopes of France’s economy sustaining its recent momentum. Finance Minister Bruno Le Maire called the movement “a catastrophe for our economy.” As of Dec. 10, it had knocked a 10th of a percentage point off economic growth for the quarter. Retailers have lost sales totaling at least 1 billion euros ($1.14 billion) due to the protests, according to industry estimates. In Paris, many retailers boarded their windows in anticipation of Saturday protests that focused on the Champs-Elysees and surrounding avenues. Iconic department stores like the Galeries Lafayette and Printemps were closed on a December weekend day that would typically be a peak for holiday shopping. Tourist operators also say they’ve taken a hit. As images of destructive clashes in Paris were broadcast worldwide, tourist reservations to the city fell 40 to 50 percent compared with the previous year.

6. What’s at stake for Macron?

He doesn’t face national elections again until 2022, and he’s always said he doesn’t care about popularity polls. 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. But with his approval ratings in free fall, European parliamentary elections and a series of municipal and regional votes in 2019 and 2020 could shape up as referendums on his policies. Surveys show that many Yellow Vest activists are likely to vote for either Marine Le Pen’s anti-immigrant National Rally or Jean-Luc Melenchon’s far-left France Unbowed. Both party leaders were defeated by Macron in 2017 and eye another shot at power. The worry for the European Union is that neither of them is wholeheartedly committed to keeping France in the bloc. Any breakthroughs by those parties in the May European elections will make it difficult for Macron to push on with his agenda -- for France and beyond.

The Reference Shelf

• Macron’s problems are a setback for centrist politicians across Europe.
• And they are handing leverage to Italy at just the wrong time for the EU.
• A QuickTake explainer on Macron’s battle against France’s labor law.

To contact the reporter on this story: Gregory Viscusi in Paris at gviscusi@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Melissa Pozsgay, Laurence Arnold

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