France enjoys a reputation for having a generous social safety net that provides well for the least fortunate. But weeks of Yellow Vest unrest have highlighted that many French citizens live in lingering economic uncertainty.

France ranks among the countries that most generously redistribute resources from rich to poor, and yet great disparities in wealth persist. In many ways the working poor – embodied by the Yellow Vests – feel they are being left behind.

Since the start of the 2008 economic crisis, the median living standard has stagnated in France overall. In 2015 this amounted to €20,300 per year, slightly lower than it was in 2008.

Wages also remain relatively low compared to other Western industrialised nations. The median annual wage of the top 10 percent was €56,640 in 2015 versus the paltry €8,280 earned by the bottom 10 percent. Individuals in the highest income bracket account for only 1 percent of the population (defined as those earning at least €106,210 annually or €8,850 a month).

Disparities between those at the top and those at the bottom also remain stark. In 2014, the top 10 percent took in 33 percent of pre-tax income compared to just 23 percent received by the lowest 50 percent, according to the 2018 World Inequality Report. The top 1 percent received 11 percent of total income.

A little more than 14 percent of France’s population – one of the lowest levels in the EU – lives below the poverty line of €1,015 per month.

Unsurprisingly, the unemployed are most likely to find themselves living in poverty (at 37.3 percent). France’s unemployment rate has hovered above 9 percent for the past decade. By contrast, the unemployment for the 28 EU members averaged 6.7 percent in November, the lowest rate since before the 2008 financial crisis, according to Eurostat.

Single-parent households and young people are also among the most at-risk portions of the French population.

The ‘myth’ of French equality

French economist Thomas Piketty says the image of France as a bastion of relative economic equality is its “great national myth”.

Per capita income grew an impressive 3.7 percent on average from 1945 to 1980, known in France as the “Thirty Glorious Years” (Les Trente Glorieuses). A major trend during the “glorious” period was an increase in the income share going to the bottom 50 and middle 40 percent, with a subsequent decline in the portion going to the top 10 percent.

But the annual rise in average national income then fell to around 1 percent over the next three decades (1980-2014), with inequality increasing acutely starting around 1983.

“The fact remains that France has also experienced a sharp rise in inequality,” Piketty wrote in a blog post for Le Monde. “Between 1983 and 2015, the average income of the richest 1% has risen by 100% (above inflation) and that of the 0.1% richest by 150%, as compared with barely 25% for the rest of the population (or less than 1% per annum).”

“The richest 1% alone has siphoned off 21% of total growth, as compared with 20% for the poorest 50%.” The disparity between rich and poor in France was less extreme than that seen in the United States but was still “fairly spectacular”, he said.

And the gains show no signs of slowing for those at the very top. “[T]he higher we go at the top of the distribution, the higher the rise in top income shares.” The World Inequality Report found that, between 1983 and 2014, 21 percent of France’s total growth went to the bottom 50 percent and the same share of growth went to the top 1 percent.

Nevertheless, France ranks as one of the European nations that most generously redistributes wealth, surpassed on this score by only five other EU countries (Belgium, Denmark, Finland, Ireland and Slovenia).

France boosted its redistribution efforts in the wake of the 2008 crisis with an increase in the top income tax rate and a revalorisation of social benefits. Universal healthcare and state-funded education also help ensure that French citizens are provided with some key basic needs.

Yellow Vest unrest

Despite France’s relatively generous social safety net, economic uncertainty is acutely felt by many. This feeling has boiled over into nearly three months of weekly Yellow Vest protests, the worst unrest France has seen in decades. Initially sparked by a proposed rise in the fuel tax that critics said would hit the poorest the hardest, the movement has since broadened to include many who feel the Macron government is out of touch with the needs of the working poor.

The man critiqued as “president of the rich” has not helped dispel this image with his dismissive comments to those looking for work or by saying many of the poor are just “screwing around”. Moreover, an announced €5 per month cut to a housing benefit would affect millions of people, including many below the poverty line and hundreds of thousands of students.

At a recent town hall meeting, held as part of the “National Debate” Macron launched in January to assuage Yellow Vest anger, attendees said the poor were being squeezed while the rich safely stash their money in tax havens.

“We’re under record fiscal pressure, with the value-added tax, income tax, social charges… yet public services are disappearing, hospitals and police stations are closing, and maternity clinics are moving away,” said one attendee at a recent meeting in Trouville-sur-Mer.

“We have to go get money from the big guys…” said another woman. “Every year, we lose €60 to 80 billion to tax havens.” A report from the main union for French tax authorities actually found this number to be much higher, concluding that tax evasion cost the government between €80 and €100 billion in 2017.

As the protests continued each Saturday, Macron eventually agreed to abandon plans for raising the fuel tax and promised extra funding for minimum wage earners and tax cuts for pensioners. But the president’s reputation for being out of touch with the concerns of the people has persisted. One Yellow Vest protester told CNews he thinks Macron has failed to recognise the “urgency” of the financial troubles that low-income workers are facing.

Others have criticised Macron for standing firm on plans to end a wealth tax on households with assets above €1.3 million. Inheritance remains a major factor in wealth disparity, one that can persist from generation to generation. In 2015, the richest 1 percent received 6.8 percent of the income but 30 percent of inherited wealth, according to the National Institute of Statistics and Economic Studies (INSEE).

“Beyond inequalities in resources, there is also an inequality of opportunity in France, exemplified by insufficient social mobility,” Michael Förster, an economist specialising in inequality at the OECD, told Le Parisien.

And France’s tax practices are exacerbating the economic divide, the World Inequality Report found, noting that “effective tax rates are lower for the very rich than for the middle class, and new tax legislations will further decrease these rates for the richest”.

Given the circumstances,it is “difficult to understand” why some “think it opportune to abolish the wealth tax on financial assets, or to impose a lower tax on financial incomes than on income from employment”, Piketty wrote. “To promote mobility, it would be more judicious to lower the property tax… for the households who have borrowed to buy property.”

France leads its EU counterparts in the amount of money it collects in taxes, which accounted for48.4 percent of GDP in 2017, the highest percentage in the European Union. The average in Europe is 40.2 percent.

Another potential problem with the French taxation system is that those earning a modest €27,500 a year are taxed at the same rate – 30 percent – as those making around €73,800, a sum that goes quite far in France.

Moreover, the top income tax bracket is defined as anyone making more than €156,244, meaning those high earners are taxed at a similar rate as the ultra-rich – those making €1 million or more per year.

Piketty said it was “urgent” that France address its problems with income inequality. When populations feel resentment at being left behind economically, they become increasingly attracted to far-right politicians who offer convenient scapegoats for their ills, such as immigrants or other marginalised populations.

The “most vulnerable social groups have the impression they have been abandoned”, Piketty said, rendering them “increasingly attracted by the sirens of xenophobia”.

France 24

The European Union urged member countries on Wednesday to crack down on schemes granting “golden visas and passports” to foreign investors, warning they can bring corruption and money laundering in their wake.

The European Commission, the EU executive, published a report urging members to curb the practice of giving foreigners — often Chinese, Russians and Americans — residency or citizenship in return for investment.

“We speak about opening (a) golden gate to Europe for some privileged people who have the money to pay for citizenship or residence,” EU justice commissioner Vera Jourova said at the report’s publication.

“We are looking at it with concern,” Jourova told a news conference in Brussels. The commissioner said investor residence and citizens schemes, known as “golden visas and golden passports,” should not be a weak link in EU efforts to curb corruption and money laundering.

The report said wealthy candidates for residency or citizenship do face insufficient security and background checks to prevent them from posing a security risk, laundering money or evading taxes. EU countries set conditions for granting and withdrawing nationality but must do so with respect for EU law, enforced by the European Court of Justice, officials said.

The bloc’s laws are important as a citizen of one EU country has the right to travel to others, exercise economic activities within the 28-nation internal market, and vote in local and European elections.

“Crime has no borders,” said Jourova, a Czech politician. The Commission complained that Bulgaria, Cyprus and Malta run schemes granting foreign investors citizenship without requiring them to live in those EU countries or show “genuine connections” to them.

The investor citizenship schemes, known as “golden passports,” offer less strict requirements than those for foreigners seeking to become naturalised citizens.

– ‘Transparency and oversight’ –

The Commission also said residence permits pose serious security risks to member states. An EU residence permit gives a third-country national the right to live in the member country and to travel freely in Europe’s passport-free Schengen area.

Britain, Bulgaria, the Czech Republic, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania and Slovakia run these schemes.

The Commission said there was a lack of “transparency and oversight” of the residence schemes, including too few statistics on how many people obtain a residence permit in this way. The Commission warned “it will take necessary action as appropriate” if member countries fail to comply with EU law and rules on border checks, money laundering and tax avoidance.

It said it will set up a group of experts from member countries to improve the transparency, governance and security of the investor schemes. The aim is to develop a common set of security checks for investor citizenship schemes by the end of 2019.

The problem of “golden visas and golden passports” has been flagged by non-government organisations. In October last year, Berlin-based Transparency International and London-based Global Witness called EU citizenship and residency as “just like a luxury good” which “can be bought”.

“By their very nature, golden visa schemes are an attractive prospect for the criminal and the corrupt,” they wrote.

Several EU members have used such schemes to give passports to around 6,000 people and residency rights to around 100,000 people in the past decade, securing about 25 billion euros ($29 billion) of foreign direct investment in return, the NGOs said.

They said Spain, Cyprus, Portugal and Britain are the countries that have received the most investment in return for visas. Spain received 976 million euros annually compared to 498 million euros in Britain.

 AFP

Paris prosecutors on Saturday opened an investigation into illegal use of diplomatic passports by President Emmanuel Macron’s disgraced former bodyguard in another potential scandal for the French leader.

Alexandre Benalla, a former campaign bodyguard who got a senior job after Macron’s election victory last year, has been caught up in scandal since July when accusations emerged he had roughed up protestors.

Macron’s office and Benalla have clashed this week over accusations that he may have used diplomatic passports after he was dismissed in August, which the foreign ministry said would be a crime.

Prosecutors have opened a preliminary investigation into “abuse of trust” over Benalla’s failure to return two passports after he was no longer in office, state prosecutor in Paris Remy Heitz said in a statement.

The probe is also investigating the illegal use of a professional documents and other possible charges. The passports were seized by the foreign ministry after press reports emerged alleging Benalla used them to enter several African countries and Israel in recent weeks.

But sources close to Benalla said he had handed over the passports to the presidential palace, but that they were given back to him again. More negative headlines over Benalla have emerged at a sensitive time for Macron, a former investment banker who has seen his popularity plummet during weeks of anti-government protests over some of his economic reforms.

The French leader, who has styled himself as a pro-business reformer, has been forced to acknowledge widespread animosity to his way of governing, seen by critics as out of touch with the economic plight of ordinary French.

– Centre of scandal –

Benalla was at the centre of a major scandal this summer after accusations emerged he had beaten up demonstrators at a May Day rally in Paris while he was wearing a police helmet. He was working for the presidency at the time.

He was not fired until after the media revelations, prompting a wave of accusations from government opponents that Macron’s office covered it up.

Uproar over the diplomatic passports and how the presidency has handled the issue has been growing since local media reported Benalla met with several African presidents, in what officials fear was an attempt to profit from his former insider status.

The president’s office said it has no information about the use of Benalla’s passports, which it said were assigned only for work in his official capacity.

Macron’s chief of staff, Patrick Strzoda, called on Benalla to explain himself on “any personal and private missions” carried out “as a consultant” while he was in office at the Elysee, following the press reports.

But Benalla replied in a letter, seen by AFP, to the Elysee Palace, that he never carried out any private missions during his time with the presidency.

Benalla has denied boasting of insider influence to win work after his sacking and has accused members of Macron’s entourage of trying to “wreck” his life.

AFP

France has been braced for fresh“yellow vest” protests for a fourth weekend in a row in the capital Paris and other cities as further street violence is looming large. Authorities have deployed thousands of police and security forces to the capital and other cities on Saturday.

They urged shops and restaurant around the famous Champs-Elysees to shutter. Museums, metro stations and the Tour Eiffel will also remain closed over the weekend. The protests began in opposition to a rise in fuel tax, but the government it has been hijacked by ultra-violent protesters.

France’s interior minister Christophe Castaner said “large scale” security operation would be launched on Saturday as they expect radical elements” infiltrate planned “yellow vest” protests. He said that “only a few thousand people” are expected to descend on the capital after the 8,000 protesters counted last weekend, “but among them are ultraviolent individuals.”

“These past three weeks have seen the birth of a monster that has escaped its creators,” he said, vowing “zero tolerance” towards those aiming to wreak further destruction and mayhem.

Prime Minister Edouard Philippe also announced on Friday evening that 89,000 police officers will be on duty across the country and armored vehicles will also be deployed in Paris, which was the scene of worst riots in decades last weekend. The French government says it will consider imposing a state of emergency amid the worst civil unrest in more than a decade, which has caught authorities off guard.

The “yellow vest” movement began three weeks ago, but has snowballed to take in other issues, including education reforms. But the demonstrations led to the worst violence in decades; dozens of vehicles were torched, shops looted and the Arc de Triomphe war memorial was wrecked. Only hundreds were arrested and scores injured in Paris.

President Emmanuel Macron, who is are expected to address nation early next week, is now experiencing the biggest crisis since being elected 18 months ago. He has s not spoken in public since he condemned last Saturday’s disturbances while at the G20 summit in Argentina. Opposition leaders accused him of turning the Elysee Palace into a bunker where had taken cover.

The 40-year old president, who is under mounting pressure, has left the issue largely to his prime minister to deal in public with the turmoil and offer concessions. Prime Minister Philippe met a delegation of self-described “moderate” yellow vests who have urged people not to join the protests.

After the meeting a movement spokesman, Christophe Chalencon, said the premier had “listened to us and promised to take our demands to the president”.

“Now we await Mr Macron. I hope he will speak to the people of France as a father, with love and respect and that he will take strong decisions,” he said. Following last weekend’s riots in central Paris and dozens of other cities and towns across France, the government decided to abandon its plan to raise the fuel tax next year.

But protesters want the president to go further to help hard-pressed households, including an increase to the minimum wage, lower taxes, higher salaries, cheaper energy, better retirement provisions.

Some of them have demanded Macro’s resignation. They say the president is part of an elitist coterie that neither understands, nor cares how they live. Police used tear gas against students protesting over educational reforms, in Lyon on Friday. According to local media, dozens of protesters were arrested.

Also on Thursday, police arrested dozens of high-school students protesting in Mantes-la-Jolie west of Paris. Images of detained students who were kneeling in mud with their hands behind their back or on the head, circulated on social media, and sparked outrage across the country. Footage shows children and teenagers, some reportedly as young as 12 years old.

The education minister, Jean-Michel Blanquer, said that the images had to be seen in the context of police responding to student violence. “There are shocking images because we are in a climate of exceptional violence.”

More than 700 students were arrested across France on Thursday alone.

Source: Presstv