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France: implications of the “yellow vests” movement

In a few short months, the “yellow vests” movement (gilets jaunes) has changed the way France is viewed in the economic and political spheres. The negative impact on the pace of activity seems modest, transient, limited to some sectors. On the contrary, the impact on the business climate and household confidence is extremely brutal.
Bruno Cavalier, Fabien Bossy ODDO BHF Corporates & Markets, Economy, Focus France, 16 January 2019

It does not square with the hard data from the real economy. As the strength of the movement has eased, a correction is likely. The budget impact is moderately expansionary. At this stage, what is most aggressively questioned is Emmanuel Macron's ability to carry out structural reforms.

The week’s focus

For the past three months, it has been impossible to look at the French economy without referring to the "yellow vests" (gilets jaunes). This spontaneous movement has flourished thanks to social networks that offer a decentralised, anonymous and free mode of expression. Every Saturday, since 17 November, there has been a national day of protest - the ninth episode has just occurred - in the form of roadblocks, peaceful demonstrations but also, in some instances, destruction of property and violence against the police, elected officials and reporters. The images of chaos in highly symbolic places in Paris during the third episode, on 1 December, have gone around the world. Some foreign leaders have not missed an opportunity since then to express, through hints (Trump, Putin) or explicit references (Salvini, Di Maio), their satisfaction with a social crisis that is undermining France.