Macron’s Great Gamble

By  Jean Tirole

TOULOUSE – In reaction to the ongoing “Yellow Vest” revolt in France, President Emmanuel Macron has decided to hold a “grand” nationwide debate. Over the coming months, locally organized workshops, Internet-based consultations, and regional citizen conferences will assess the French public’s views on four issues: environmental policy, democracy and identity, taxes, and the organization of the state.

But Macron’s plan faces three obstacles. For starters, French public opinion is rife with contradictions. The yellow vests, for example, want both lower taxes and more public services. Neither demand is unreasonable. But nor is such a fiscal approach sustainable in a country where public expenditure amounts to 57% of GDP and the debt ratio, already officially estimated at close to 100%, does not include large off-balance-sheet public liabilities like unfunded pensions.

Complicating matters further, there is broad support in France both for the yellow vests, whose rebellion started with a demand to repeal the carbon tax levied on fuel consumption, and for an initiative to sue the French government for failing to address climate change…..

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