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French ministers floated the possibility of petrol vouchers for low-income households on Monday, as President Emmanuel Macron’s government seeks to limit the damage from surging energy prices to his economic record six months from a presidential election.
The government has already scrambled in recent weeks to cap gas and electricity prices and increase handouts to help the poor pay winter heating bills as energy prices jumped worldwide on the strength of the post-pandemic economic recovery.
With economic growth set to top 6% this year as the COVID-19 crisis subsides, the economy had been viewed as Macron’s strong suit heading towards the April election, in which he is widely expected to seek a second five-year term.
But the price spike could hurt his record by eclipsing purchasing power gains during his presidency, which were fuelled largely by tax cuts.
As petrol prices have steadily climbed in recent weeks, the government has faced growing pressure to cut taxes paid at the pump, which can amount to up to 60% of what drivers pay.
Finance Minister Bruno Le Maire said, however, that would not only be costly to public finances but would also amount to a subsidy for fossil fuels at a time when the government was trying to wean the economy off them.
“I prefer ‘petrol cheques’ to a lowering of taxes”, Finance Minister Bruno Le Maire told Europe 1 radio.
Environment Minister Barbara Pompili also made the case for petrol vouchers on France 2 TV, but added that it was a complex process to put in place.
Yellow vests
With energy prices a big part of households’ budgets, tax on them can be a sensitive issue in France and were at the heart of waves of weekly demonstrations by protestors known as “Gilets Jaunes” due to the high-visibility yellow vests they wear.
Once again, squeezed purchasing power has become…
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Source : france24
