Damage to French economy mounts as 'yellow-vest' protests continue

The Bank of France estimates losses to the economy at €4.4 billion, figure some analysts fear could more than double

Protesters wearing yellow vests (gilets jaunes) set cars and barricade on fire as they clash with riot police. EPA

After a troubled year marked by plummeting public approval and disarray among his own supporters, the last thing France’s president Emmanuel Macron needed was a popular protest aimed at paralysing the nation and its economy.

The gilets jaunes movement – named after the fluorescent yellow French vests motorist are legally required to carry in their vehicles – began in November as an embittered response to the crippling effect of rising fuel prices on household budgets.

Despite lingering suspicion of far-right influence, it has broadened to cover issues important to millions of ordinary French people: rising prices, high taxes and weak spending power.

But damage to businesses and employment caused by blockades and outbreaks of violence at demonstrations is mounting.

The Bank of France estimates losses to the economy at €4.4 billion (Dh18.4bn) - a figure some analysts fear could more than double - hundreds of small firms are reported to be on the brink of filing for bankruptcy and more than 40,000 workers have been laid off.

Alarming scenes of lawlessness on the most famous boulevards of Paris has also hit French tourism, with hotel bookings down by 10 per cent. Motorways have been blocked, toll booths set ablaze and factories picketed. Ten people have died in incidents related to the roadblocks.

“It doesn’t just affect Paris but businesses of all sizes, in small towns and large, where activities have been blocked," Olivier Dussopt, secretary of state for public accounts, told the French broadcaster LCI. "We are very worried.”

Haulage firms, whose drivers have been impeded by blockades the authorities have proved powerless to prevent, will hold crisis talks with government officials in early January.

Bruno Le Maire, the economy minister in Mr Macron’s beleauguered centrist government, has said the consequences for trade are “catastrophic”.

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France's 'yellow vest' protests decline on fifth weekend

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The protesters have no electoral mandate, a lack of coherent leadership and a confused jumble of demands. But their capacity to attack the French economy has been striking at a time when the power and influence of traditionally militant trade unions have waned.

And despite the involvement of extreme right and left-wing elements, and serious vandalism and looting, the movement commands public support, 70 per cent in one of the more recent polls with more than half (54 per cent) believing the protests should continue.

On French television, one middle-aged “gilet jaune” praised rioters for ensuring the protests were not simply ignored.

Reports that prices of fuel at the pump are actually at their lowest point for the whole year will almost certainly be disregarded by those intent on maintaining pressure on the president, analysts say.

Having vowed to break successive French presidents’ habit of succumbing to the clamour of the street, Mr Macron nevertheless caved in, suspending a contentious ecological fuel tax and raising the minimum wage and pensions among other concessions.

The closure of shops is not confined to Paris’s celebrated Champs-Elysees, the setting for some of the fiercest of clashes with police. One furniture shop owner in France’s second city, Marseille, reported turnover down by 40 to 50 per cent.

Ministers estimate that concessions already granted will cost €8-10bn. But official claims that the movement is weakening are widely disbelieved with the French left burying misgivings about the involvement of far-right parties to support the protests.

While the number of protesters taking part in successive weekend demonstrations around France has fallen, the movement shows no immediate sign of collapse. Mr Macron faces a steep uphill struggle to regain the public trust that swept him to power in May 2017.