Economics
Macron's Concession to Protesters Risks Fiscal Credibility
- Macron had made sound finances a cornerstone of his presidency
- France’s 2019 budget plans are already testing EU rules
Macron in Paris on Dec. 2.
Photographer: Geoffroy Van Der Hasselt/AFP via Getty Images
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Emmanuel Macron’s suspension of fuel-tax hikes is an olive branch to protesters that could come with a high price tag for the French president as it pushes the deficit back toward European limits he has pledged to respect.
After violent demonstrations and with his poll ratings in free fall, Macron’s government said it would suspend for six months its plans to continue hiking gasoline and energy taxes from January. In the 2019 budget, France had penciled in energy taxes that would raise over the full year an extra 1.9 billion euros ($2.2 billion) from households and 1 billion euros from companies.