The Economic Riots in France
France is known to be a peace-loving country. Very little, if any, social unrest has been reported from France over the past many years. Observers were of the opinion that rising immigrant population in France may end up creating a dangerous situation in the distant future. However, what they failed to see was the fact that the economic divide was rising in the country.
This economic discontent finally became visible to the world during the French urban riots. The riots were as sudden as they were severe. President Emmanuel Macron who was visiting Argentina had to cut short his visit and return to his country. Also, at one point in time the situation got so bad that French leaders were mulling whether it would be feasible to impose emergency in the nation.
During these riots, protestors who were identified as people wearing yellow vests disrupted daily life in France over economic issues. In this article, we will have a closer look at what these economic issues are and why certain segments of the French society care so much about them.
The Dreaded Fuel Tax
The most obvious catalyst to the whole riot situation was the fact that the French government decided to impose a new fuel tax on the people. The French government claims that this tax is being introduced in order to protect the environment. The idea is that the government wants to make it more expensive for people to use the wrong kind of energy. Hence, they have imposed a tax on the usage of fossil fuels. The French government had planned to use the money from these taxes in order to subsidize the development of environmentally friendly fuels.
The problem is that the imposition of taxes on fossil fuels hurts the wrong economic segment. The public transportation infrastructure in rural France is poor. As a result, having an automobile is more of a necessity than a luxury. Since most of the French lower middle class uses automobiles, this tax was viewed as being a direct attack on them. This is the reason why fuel prices tipped off the French consumers who took their protests on to the streets in order to make their displeasure known.
The French government has acknowledged their mistake. They have immediately rolled back the new tax hike as of now. However, this seems to be driven more by political reasons rather than economic ones. The French protestors have been alleging that the fuel prices in France have never been higher. The fact is that the tax on French fuel prices is about as high as they were 20 years ago.
Also, French consumers have been alleging that they pay the highest tax on fuel within the entire European Union. Consumers in the Netherlands pay much higher taxes on their fuel. 68% of their fuel bill is comprised of taxes. On the other hand, about 64% of the French fuel bill comprises of taxes. The tax proposed by Emmanuel Macron’s government would have changed this situation drastically. The French don’t pay much more than the British. However, the general population seems to be exceptionally annoyed.
Is This a Shakedown?
What started as a genuine protest seems to have morphed into a shakedown of the government by the protestors. The French government has already rolled back the tax which was introduced. However, the protestors now want the taxes to be completely waived off instead of only being postponed.
Also, the protestors have now started complaining about the high cost of living in France. They are of the opinion that the cost of living is rising sharply whereas the real wages have been stagnant for a very long time. France is also facing close to 9% unemployment which is quite high by European standards. Hence, the French believe that their government is taking too much from them while giving pretty much nothing in return. This is the reason why they have now started demanding increased wages at least for the government jobs.
The more the French government is giving in to the pressure, the more the protestors seem to be increasing their demands.
The Bottom Line
The French riots should serve as a wake-up call to many economies around the world. This is because on paper the French economy is growing albeit at a slower rate. However, the average French person does not see any growth in their income. This is because of the rising income equality that has now become a standard feature of western economies.
Also, western nations need to realize that their citizens care more about their personal economic gain that they do about the environment. This is particularly true of the lower as well as the middle class. Hence, if governments continue to dish out ill-conceived policies like the French did, there might be many more such riots in the future.
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