The Yellow Vests: Fuel, Fiscal Injustice and Fury

WHAT HAPPENED? 

The origin of the gilets jaunes (yellow vests) movement can be traced back to 10 October 2018, when more than 200,000 people joined a Facebook event created by two truck drivers calling for protests against rising fuel prices in France. The yellow vests — named after the high-visibility vests drivers in France are required to carry by law — staged their first national day of action on 17 November, which attracted 300,000 people and caused major disruptions. Protesters blocked roundabouts, toll booths and highways across the country, blockaded fuel depots and staged public demonstrations both in large cities and smaller towns throughout the country. 

Over the next few weeks, the protests continued to gather momentum. On the third weekend of protests on 1 December, protesters in Paris set fire to hundreds of vehicles, damaged and looted businesses, and attacked riot police with rocks, flares and other projectiles. The police responded with tear gas, water cannons, stun grenades and rubber bullets. In Paris alone 110 people were injured, at least 268 arrested, and more than USD 10 million in estimated property damage was recorded, in the worst rioting France has experienced since the 1960s. 

Since early December, the yellow vests movement has grown to encompass various sectors, industries and groups under a broad anti-government umbrella. The movement has attracted support from high school students, ambulance drivers, hospital staff, local mayors, lawyers and unionised workers, who now feel empowered to air their grievances and protest against the policies of President Emmanuel Macron’s government. 

The yellow vests have also inspired similar protests beyond France’s borders. Leaderless, loosely organised protests, broadly linked by their opposition to poor living conditions, have been using the symbol of the yellow vest during demonstrations held in countries ranging from Serbia to Sweden, Israel to Iraq and Cote D’Ivoire to Canada.

WHAT ARE THE DRIVERS?

The initial driver of the demonstrations was a proposed increase to French fuel taxes, which is already among the highest in Europe, at 64 percent for petrol and 59 percent for diesel (four and nine percent above the west European averages respectively). The government justified the fuel tax increase as a policy to combat climate change. However, the tax increase disproportionally impacted citizens in France’s smaller towns and cities. With limited public transportation services, many low- and middle-income workers in rural France are dependent on their cars, and perceived the tax increase as a representation of how the Parisian elites are disconnected from the living conditions of France’s majority. As one yellow vest protester commented, “The government talks about the end of the world, while we are worried about the end of the month.” 

Fiscal injustice, and the growing gap between France’s rich and poor, has been a continuous theme since the beginning of Macron’s presidency in May 2017. In October 2017, Macron adopted a package of pro-business policies, including scrapping a wealth levy on everything except property assets — effectively cutting the wealth tax by approximately 70 percent. The tax cut resulted in USD 3.6 billion lower taxation revenue in 2018 compared to the previous year. The protesters believe the lost tax revenue could have been used to help France’s low-income workers, exacerbating perceptions of Macron as a “president of the rich.”

Nevertheless, much of the underlying pressure felt by low- and middle-income workers precedes Macron’s presidency. Over several decades, French society has become increasingly divided between rural and urban areas across the country. The impact of the global financial crisis in 2008 has been most starkly felt in rural France. As several iterations of French governments have implemented policies of deregulation and austerity, people in rural areas reliant on a generous social welfare system have especially felt the impact of these budget cuts. 

The scaling back of France’s welfare system under broad austerity policies implemented since 2009 has gone hand in hand with a decline in purchasing power, particularly for low- and middle-income workers (Figure 1). While wages and living standards increased for three decades following WWII, these increases have stagnated since the late 1980s, growing at approximately one percent per year. Many industries in France’s rural areas have not recovered since 2008, with the financial crisis erasing a large number of permanent jobs. Unemployment in France has still not recovered to pre-2008 levels (Figure 2) and is currently just under 10 percent, in comparison with four percent in Germany. 

Ultimately, the proposed fuel tax increases sparked broader resistance against perceived fiscal injustice in France, uniting people from across the political spectrum in forming an unpredictable anti-government social movement.

WHAT’S NEXT? 

The yellow vests continue to stage weekly demonstrations, and despite declining participation over the festive season, 69,000 people participated in the most recent protest on 26 January. The movement remains broadly popular, with multiple public opinion surveys suggesting that between 70 and 80 percent of the general population sympathises with the yellow vests. Despite violent clashes between police and protesters, the broader population blames this on fringe actors, rather than general participants. 

Far-left and far-right provocateurs, aptly referred to as casseurs (breakers), have allegedly been behind most acts of vandalism and attacks on police that have come to characterise yellow vests protests, particularly in Paris. While police have been deployed in increasing numbers during yellow vests protests, they have not been able to entirely prevent acts of malicious damage perpetrated by the casseurs. But there are indications portions of the general population are becoming disillusioned, and on 27 January, a rival group called the ‘red scarves’ staged a demonstration of about 10,000 attendees in Paris calling for an end to the violence during yellow vests protests. 

The government faces a difficult task in responding to the demands of the yellow vests. It has already rolled back the planned fuel tax increase, albeit for a limited six-month period, and has promised a broad package of economic policy reforms, including a seven percent increase to the minimum wage and tax-free bonuses. However, the yellow vests comprise activists from across the political spectrum, and their demands are just as varied. One such demand is an ongoing call for Macron’s resignation. Thus, although participation levels declined following the announcement of these concessions, they did not result in an end to the protests. 

The yellow vests are likely to continue to protest in the short term as any government concessions cannot significantly and immediately alter the economic realities driving the unrest. Other than being disaffected with the political status quo, the yellow vests have no clear political alignment, although a better-defined political agenda may soon emerge. On 24 January, the yellow vests announced an intention to field candidates for the upcoming European elections in May 2019. Nevertheless, despite the potential formalisation of the social movement into a coherent political organisation, anger over perceived fiscal injustice in France is unlikely to subside in the short term. Future protests are also likely to continue to attract fringe groups from across the ideological spectrum, looking to capitalise on public anger, and provoke French security forces with further attempts at vandalism and rioting.