France to postpone disputed eco-tax amid protests

The French government plans to postpone the introduction of a controversial environmental levy by six months amid escalating anti-tax protests.

President Francois Hollande’s government is to suspend the application of the so-called eco-tax until July next year after municipal and EU elections are held, according to a report by French newspaper Le Monde on Saturday.

The government had planned to apply the tax, which was supposed to bring in more than one billion euros (USD 1.33 billion) per year, on January 1.

This comes as the government has seen violent anti-tax protests since it came to power in May 2012.

The latest protest against the eco-tax was held on Saturday in Cotes-d’Armor, which ended with police firing teargas and using water cannon to disperse the crowd.

Protesters say they are against the measure that will tax heavy goods vehicles to help finance rail projects while many people are jobless and struggling with poverty in the country.

In the wake of the recent demonstrations, the international rating agency, Standard & Poor, downgraded France’s credit rating on November 8 from AA+ to just AA, criticizing the country’s high taxes and “the government’s inability to significantly reduce total government spending.”

Hollande’s government has imposed 30 billion euros (USD 40.46 billion) in tax hikes this year in a bid to bring its budget deficit below the EU target of 3 percent next year.

The government’s economic policies have angered the French citizens. A poll published on November 5 by IFOP showed 91 percent of French people want Hollande to change his policies and his performance.

Furthermore, the country’s unemployment rate reached record highs in September, with nearly 3.3 million people out of work.