Social unrest further darkens France's economic outlook
Against a backdrop of rising energy prices, declining purchasing power and increasing bond yields, the proposed 2027 budget relies on a growth forecast of 1%, now more fragile than ever.
French President Emmanuel Macron declared on Monday that his administration would unveil a series of measures to address weeks of protests across the country. The protests, stemming from a range of grievances, have led to concerns about potential further unrest. Prime Minister Sebastien Lecornu is scheduled to hold a press conference following a meeting with high school student union representatives who are demanding increased educational resources and a reform of the university admissions system, which they claim perpetuates inequality.
During a visit to Marseille, where Macron toured the aftermath of previous protests, he emphasized that the government would respond to the "legitimate demands" underlying the social movement. He reiterated the Interior Minister's earlier statement that unrest was anticipated for the upcoming weekend. The protests have failed to abate since violent clashes nine days ago spread to more than 50 cities, raising fears about the government's ability to maintain control over public order.
In response to the unrest, the interior ministry deployed 70,000 police officers for Saturday's demonstrations, which student unions organized to highlight rising living costs and deteriorating public services. The movement has transcended its initial focus on student issues, attracting trade unions and "yellow vest" activists, who protest the economic pressures, including high fuel prices, through their distinctive high-visibility jackets and mass demonstrations.
Interior Minister Laurent Nunez noted that the extensive police presence thwarted a recurrence of the violence witnessed earlier in the month. However, when asked about the possibility of additional disturbances during a protest planned for October 31, Nunez responded cautiously, stating, "Clearly, yes." He added that Halloween, traditionally a lively night, was expected to be particularly challenging.
Nunez reported that 1,435 individuals were arrested nationwide during Saturday's protests, and there was a new development: organized far-right groups clashed with far-left activists in cities like Nice and Montpellier, apparently aiming to protect businesses.
The government presented Saturday's operation as evidence of its regained control, despite the sporadic violence, particularly in France's major cities of Paris, Marseille, and Lyon. Government spokeswoman Maud Bregeon acknowledged that protesters had raised valid concerns that needed to be heard, but stressed that maintaining calm was essential for productive negotiations.
With his presidential term set to conclude in April and the national budget facing significant strain, Macron's capacity to alleviate the crisis through costly concessions, which previously curbed similar unrest, is limited.
Business leaders expressed ongoing economic repercussions from the unrest, even as the situation appeared more stable on the weekend. Alain Di Crescenzo, the head of the CCI France, representing the country's chambers of commerce and industry, commented that many retailers had remained closed as a precaution following the violence of October 17.
Sales had dropped by approximately 80 percent, and Di Crescenzo lamented the toll on local commerce, noting that shopkeepers were experiencing fatigue and demoralization, threatening the vitality of small businesses.
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