Yellow Vest movement credited with ending 8 years of austerity in France

The 2020 budget will push France one-tenth of a point above the European Union’s arbitrary 3 percent fiscal deficit rule. That has long-been the basis for scores of billions of cuts to government services and an even greater amount of tax cuts for the wealthy and corporations. 

Analysts said Macron feared that another austerity budget would have provoked more social unrest. Macron has apparently chosen to spend his political capital not to satisfy Brussels, but in his unpopular fight to raise the retirement age and radically overhaul the pension system. 

With a global recession now on the horizon, France’s austerity march has not given them any room for error.

Since 2008 France’s average annual growth rate has been less than 1 percent. Last week the central bank said they expect just 1.3 percent growth until 2022 at the earliest. 

Many wonder how much more austerity France could take. Inequality rates have soared and the unemployment rate remains not far from the record high of 10 percent. 

Half of the 10 billion euros in total tax cuts were already granted as part of minor concessions to the Yellow Vests. Corporations still got their taxes reduced by more than 2%, despite years of record profits. The armed forces and security services got huge increases, likely due to the Yellow Vests, while the tax collecting ministry continues to be targeted for job cuts.