French President Emmanuel Macron promised on Monday to cut taxes for retirees and raise the minimum wage by 100 euros by January, but he refused to reinstate a wealth tax in response to a wave of protests that has challenged his authority .
Currently, the minimum wage in France is one thousand 498 euros.
«We will respond to the economic and social urgency with solid measures, reducing taxes more quickly, keeping our expenses under control, but not with a U-turn,» Macron said in a televised address to the country.
Macron faces enormous pressure on the streets from the so-called ‘yellow vests’ to further increase tax cuts and social security costs in order to increase the purchasing power of households, while at the same time containing the France’s budget deficit below the EU limit.
Called thus by the fluorescent safety vests that French motorists must wear, the protests of the ‘yellow vest’ arose on November 17, when almost 300 thousand protesters across the country took to the streets to denounce the high cost of living and the economic reforms of Macron.
The protesters say that the reforms benefit the rich and do nothing to help the poor. The government canceled a planned increase in taxes on gasoline and diesel this week in an attempt to defuse the situation.
Earlier, the French Central Bank said that the situation in France will slow growth until it almost stagnated in the last quarter, complicating the president’s task when it comes to finding concessions that will ease the movement of the «yellow vests».
The slowdown is a «reality for our entrepreneurs and entrepreneurs, is the reality for those whose stores have been destroyed and plundered in the most violent way,» said Le Maire to the RTL radio network. «And it is a reality also for our foreign investors.»
In a sign that the perception of risk in the holding of French debt has increased, the yields of the sovereign bonds of this country increased this Monday, raising the differential of the papers to 10 years against the German equivalent to its maximum since May. , around 46 basis points.
On the Paris Stock Exchange, the airport operator ADP lost 0.1 percent, while retailers Carrefour, Casino and FNAC Darty lost between 1 and 1.6 percent. The Accor hotel company dropped 0.7 percent, although it later cut losses.
The Bank of France predicted on Monday that the second economy of the euro zone will have a growth of only 0.2 percent in the last quarter compared to the previous three months, a drop of 0.4 percent compared to its previous estimate.
The finance minister, Bruno Le Maire, declined to offer an estimate of growth for 2018, but predicted that the nationwide protest will subtract 0.1 percent from domestic production. His «number two» indicated that the growth projection will be «closer to 1.5 percent.»