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Macron, Yellow Vests, EU Rules and Financial Ruin

Macron, Yellow Vests, EU Rules and Financial Ruin

There is no question that the ideas that President Emmanuel Macron brought in with him when he was elected were strong, but he is clearly out of touch with the European Union, its rules as well as the financial security of France, as spending and taxes are out of sync. The new measures that are being implemented are expected to increase the country`s fiscal deficit and breach rules that are set by the leaders in Brussels. This is now a battle that has countries in the EU accusing Brussels of treating some countries better then others.

In an attempt to stop months of ongoing protests at home, Macron announced Thursday income tax cuts totaling 5 billion Euros ($5.6 billion US). He also said that worker bonuses of up to 1,000 Euros would not be taxed and single parents would get extra support and that no schools or hospitals would be closed until 2022. These new measures will increase the French fiscal deficit further and breach some key rules that form the core of the European Union. Analysts at Berenberg Bank estimate that France will see its fiscal deficit rise to 3.2% this year, even without these new measures. The European Union says that nations should not surpass a deficit threshold of 3%.

Italy has an ongoing battle with the EU as it has been criticized for breaking the same rules on fiscal policy. Italy now makes the claim that some countries in Europe get special treatment. This is because France has breached rules on several occasions without receiving any serious punishment, like a fine or others, from the EU. The Italian Deputy Prime Minister Matteo Salvini said that the EU should treat Italy the same as it treats France with regards to the government spending plans.

France is now in a tough situation as spending will likely to rise more in 2020, making matters worse.

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