Macron Gas-Tax Retreat Is No Surprise


Macron Gas-Tax Retreat Is No Surprise

Dec 11, 2018 2 min read

Senior Research Fellow, Margaret Thatcher Center for Freedom

Ted Bromund studied Anglo-American relations, U.S. relations with Europe and the EU, and the U.S.’s leadership role in the world.
Yellow vests protest against fuel prices in Paris. MAXPPP

The latest riots in Paris — the most extensive since 1968 — show that while Europeans may pay higher gas taxes than we do, they don’t enjoy it. But the riots aren’t just about the price at the pump. They reflect the irrelevance of Emmanuel Macron, France’s latest man on a horse, to the problems that led to his election — and those problems are not uniquely French.

True, France has a tradition of ugly protests. Farmers regularly block roads to complain that someone else isn’t giving them what they want. In 2016, modest reforms to France’s restrictive labor market led as many as a million union members and students to take to the streets.

But even outside of protest-happy France, gas taxes are risky to raise. In 2000 in Britain, Tony Blair’s Labor Party was ahead of the rival Conservatives in the polls — until he increased taxes on gas. The result was the “Dump the Pumps” protests that temporarily collapsed Blair’s popularity. If it could happen to Blair, it’s no surprise it happened to Macron.

The broader problem is that the hopes Macron offered were illusory. In June, I participated in a discussion in the Parisian embassy of a small European country. The embassy’s courtyard was impossibly beautiful. It seemingly couldn’t exist in the same universe as looted shops.

So I was surprised when a European diplomat muttered to me that he thought Macron had two years, or less, to fix the French economy before there was a catastrophe. Macron, he said, was an object of fantasy — and he needed to show results before the fantasy faded.

There was never a chance that was going to happen. French governments have tried to reform the French economy for years, if not decades. But much of French society — the farmers, the unions, and the students — don’t want reforms if they come with a price tag.

The immediate cause of the riots was Macron’s decision to increase gas taxes. Bear in mind that the French government spent 56.5 percent of France’s GDP in 2016 — a higher share than any other developed nation. And yet Macron’s idea of a reform was to tax carbon.

But gas taxes hit the public unequally. Rural voters who have to drive, and the middle class, pay the costs. Macron’s support was already weak in rural areas — he won over 70 percent of the vote in 2017 in the cities, but less than 60 percent of it outside them. Gas taxes were bound to go down badly in the country. Even the cities, though, are not a monoculture. Real estate prices in Paris — as in London or New York — are so high that the city has little room for the middle class. You can be rich there, or you can be poor and likely an immigrant. But it is much harder to be traditionally left, right — or French.

So what’s happening in France is not that different from what is happening in the United States. The welfare state is unaffordable, but in an unsure world, its beneficiaries cling to it.

Of course, the French style of protest is unique to France. But, in political terms, France is not all that unique. Macron was hailed in 2017 as a rejection of populism. Actually, with his new political party and his unfounded image as a miracle-worker, he embodied the populist rejection of the establishment.

What he didn’t have was answers. Macron was always an illusion. But in a Western world that wants it all without having to pay for it, there is nothing particularly French about disappointed expectations.

This piece originally appeared in Newsday