Analysis: France

And now for the next crisis ... Ecotax climbdown won't save French Socialists' bacon

Ecotax opponents, wearing red bonnets to recall an anti-tax uprising in 1675, on a demonstration in Brittany last weekend
Ecotax opponents, wearing red bonnets to recall an anti-tax uprising in 1675, on a demonstration in Brittany last weekend AFP/Fred Tanneau

It's not quite a u-turn but French Prime Minister Jean-Marc Ayrault's decision to suspend an "ecotax" on road freight is bound to reinforce the impression that his government' is stumbling from crisis to crisis. The decision is the seventh climbdown on taxation and incomes by a Socialist government that is caught between its commitment to reduce France's budget deficit and its fear of losing yet more support in the polls.


Ayrault on Tuesday announced that he was suspending implementation of the levy on heavy goods vehicles carrying more than 3.5 tonnes of goods so as to examine the effects on far-flung regions.

He appealed for dialogue but that call seems to have fallen on deaf ears.

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Protest organisers said Tuesday that a protest organised for Saturday 2 November would go ahead and demanding that the tax be completely scrapped.

And members of the mainstream right-wing party, the UMP, had already refused to attend Tuesday morning's meeting of MPs and local councillors from Brittany that led to the suspension.

That particularly rankled on the left since the tax was actually introduced by the previous UMP government, which kindly left its implementation to its successor.

There was some good news for the government when the head of France's largest farmers' union, the FNSEA, declared himself "satisfied" with the decision.

"We asked for an adjournment, not a suspension," Xavier Beulin declared.

But the right-wing agitation against any and all tax increases is unlikely to subside, all the more so since it has borne considerable fruits.

The government has backed down on seven proposed tax increases, some of which were even its own.

Last weekend it renounced 200 million euros of expected income by watering down plans to tax some savings, a move that followed exemptions on VAT rises, two taxes on business and attempts to rein in top bosses' incomes.

Trade union leader Thierry Lepaon claimed on Tuesday that the campaign against the ecotax was an example of employers manipulating their employees to oppose a tax that "helps us live together better", adding that it was part of a "general offensive" by the employers' union, Medef.

"The bosses have organised in this country to no longer pay social security contributions and taxes and not to pay the ecotax and I see they have organised very well," the CGT chief said.

The Medef on Monday called for the postponement or cancellation not only of the ecotax but also of the tax on companies that pay salaries of more than a million euros.

That measure was the government's fallback measure after its proposal to tax the incomes themselves was overruled by the Constitutional Council and it, too, has met vociferous opposition, including a threat to cancel football matches for one weekend.

Parliamentary elections 2012

With President François Hollande's opinion poll ratings hitting an all-time low at 26 per cent, The right is clearly convinced that it has found a political winner in opposing any and all tax increases, including those that it voted into operation.

UMP leader Jean-François Copé, himself not doing much better in the polls, hailed the suspension of the ecotax on behalf of "enterpreneurs, farmers, the French", for once giving Ayrault good marks for "having heard their cry of anger and their discontent".

Earlier he claimed that the country was undergoing a "fiscal revolt" and promised to cut taxes to be financed by massive cuts in public spending.

That's a message echoed on the far right, which tries to turn it against Copé and his friends.

The website of Marine Le Pen's Front National has a banner declaring "No to the taxes of the UMP and the PS [Socialists]" and, despite the fact that the FN's environmental programme advocates localised production of food and other goods, the party backed the protests.

Although its score in elections has risen recently, the FN had never done well in Brittany but some far-right Breton nationalists, as well as some far-left ones, were involved in the anti-ecotax protests, while a number of websites and Facebook pages linked to this year's anti-gay marriage protests have also jumped on the bandwagon.

In fact, despite a wave of closures of factories, abattoirs and food-processing businesses recently, Brittany has lower unemployment than most French regions at 9.1 per cent.

It certainly has its problems, ranging from long-running discontent about the decline of the regional language to relatively poor transport links to the rest of the country.

And one key sector of its economy, agriculture and food-processing, is especially fragile.

Much of the region's farming is industrial scale, producing eggs, chicken and pork of uncertain quality in vast quantities for sale to food-processing factories or supermarkets.

That model, designed to maximise profits, has been hit by falling world prices thanks to competition from nearby Germany, where there is no minimum wage and abattoirs are reported to be employing east European workers for a quarter of the wages paid to French workers, to Brazil.

The Socialists, facing local council elections next year and wary of losing support in a region where it won 56 per cent of votes in the presidential election, had already granted 15 million euros in aid to agriculture and related industries in the region and was clearly terrified at the prospect of more stormy protests, not to mention mass electoral defection.

Now they have to face charges of betrayal from the green movement.

MEP Noël Mamère, who recently resigned from the Green party, declared himself "devastated" by the decision and invited his former comrades to ask themselves why they were still in the ruling coalition, while another MEP, José Bové, called the suspension "pathetic".

As well as the ecotax, the Socialists have inherited a Europe-wide economic crisis and EU orders to cut France's budget deficit and give no sign of knowing how to tackle either. There's no way they can avoid another political crisis, probably sooner rather than later.

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