French President Emmanuel Macron announced tax cuts and wage rises on Monday in a bid to placate anti-government protesters, but the move will increase France's budget deficit and is likely to create tensions with the European Commission.
Macron promised on Monday to raise the minimum wage by 100 euros ($114) a month and that overtime will not be taxed or subject to social welfare charges. He also said the tax hike on pensions will be reversed for anyone with an income of below 2,000 euros a month, and encouraged companies to pay a tax-free end-of-year bonus.
France has been wracked by four weeks of civil unrest and anti-government protests by yellow-jacketed protesters. The demonstrations started in response to planned fuel tax increases but morphed into wider anti-establishment, and particularly anti-Macron, protests and riots.
The French government initially responded by delaying and then cancelling the planned fuel tax rises but protesters were not placated by the move and unrest continued last weekend.
In a televised address Monday after scenes of havoc in Paris on Saturday, Macron said he bore partial responsibility for what he said was an insufficient response to souring public sentiment.
"At first it was anger against tax and the prime minister responded by cancelling and removing all rises planned for the start of the new year. But this anger is deeper. I feel it is fair in many ways," he said. "I may have given you the impression that I didn't care, that I had other priorities. I know I may have upset some of you with my words."