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Europe

French PM says tax cuts are solution to Yellow Vests crisis

media Protesters stand amid tear gas smoke during an anti-government demonstration called by the Yellow Vest movement in Toulouse on February 23, 2019. Pascal Guyot / AFP

The French government must implement bold tax cuts in response to the  Yellow Vest protests, Prime Minister Edouard Philippe argued Monday as he revealed the results of a major public consultation on the crisis.

Giving the first conclusions of a "Great National Debate" which was launched in January, Philippe said that French citizens had expressed "an enormous exasperation" over the country's tax burden, which is the highest in the world.

"The debates show us very clearly which way to go. We need to lower taxes, and lower them more quickly," Philippe who told an audience in Paris.

The "yellow vest" protests, so called for the fluorescent vests worn by demonstrators, began in small-town France in mid-November, initially over fuel taxes before spiralling into a nation-wide revolt against President Emmanuel Macron.

The 41-year-old came to power in May 2017 promising pro-business reforms and tax cuts for companies and investors to encourage job creation, earning him a reputation as a "president of the rich."

Philippe, a centre-right fiscal hawk who has previously called for tax cuts and reductions in public spending, said the government needed to go further.

"We have reached a point where hesitating would be worse than an error, it would be an offence," Philippe added. "The need for change is so radical that any conservatism, any feebleness would be unforgiveable in my view."

Macron is expected to announce his conclusions in a major speech in the next fortnight, with the "Great National Debate" billed as a watershed moment in his nearly two-year-old presidency.

Though he is known to favour further tax cuts too, he has ruled them out without reductions in public spending -- which could prove hugely controversial.

Successive French leaders have faced street protests every time they attempted to trim France's vast public sector, underlining the difficult balancing act ahead for France's youngest ever president.

The country has the highest taxation rate in the world, according to the Paris-based Organisation for Economic Cooperation and Development, with taxes equivalent to 46.2 percent of its gross domestic product (GDP).

French public spending is the second-highest in the world after Finland and is the equivalent of 56.8 percent of GDP, according to the OECD.

National 'Bla-bla'?

The "Great National Debate" has involved 10,000 meetings in community halls around the country, around two million online contributions and has seen Macron appear at local events for nearly 100 hours in total.

"I intend to transform anger into solutions," he declared in an open letter to the country on January 13 which launched the exercise, referring to the "yellow vest" protests which had seen crowds block roads and

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