“Yellow Vests” renewed protests in France.
• Violent protests were observed in France by the “Yellow Vests” due to rising living costs.
• Major Reason: The proposed increase in the “Fuel Tax” by the newly elected President Emmanuel Macron’s government.
• Challenges: It will have adverse impact on the climate change policy. The purpose of increase in “Fuel Tax” was to induce motorists to go green, and reduce the CO2 emissions.
– Now, with the violent street protests, the Government will have to look for other alternatives to meet its obligations under Paris Climate Change Agreement.
• Steps taken by the French Government: It has decided to roll back its proposal to increase the “Fuel Tax”. Some of the Fiscal policy measures taken are as given below:
– A minimum wage increase by €100 per month from 2019 and it will be met by the government rather than employers.
– A planned tax increase for low-income pensioners would be cancelled.
– Overtime pay would no longer be taxed.
– Employers would be encouraged to pay a tax-free end of year bonus to employees.
• Yellow Vests: The protests are named after the high-visibility fluorescent yellow safety jackets French motorists have to keep in their cars since 2008. They are the group of people who are protesting the rise in Fuel Tax.
• Purpose of Keeping Yellow vests: The vests are intended for use in emergencies, and protesters used them to convey the message that they were living in such dire straits that even a small tax increase, could drive them to rebellion.