In a bid to end the violent protest movement, the French government last week announced a package of measures for low-income workers that will cost up to 10 billion euros (£9bn). And Mr Philippe said in an interview with Les Echos newspaper when asked about demands for a national vote: “I don’t see how anyone could be against this in principle. Referendums can be a good instrument in a democracy.” The prime minister stressed a citizens’ initiative referendum had to be held in the right conditions and answer a specific question.
Mr Philippe also admitted that President Emmanuel Macron’s government had “made mistakes” in its handling of the “yellow vest” crisis, and “not listened enough to the French people”.
He said: “I have no doubt at all that [the French] want us to transform this country. And they must know that I share their impatience. We will continue to fix the country but involve them more closely in decision-making.”
The “yellow vest” protest movement – named after the high-visibility jackets all French motorists must carry – was born on November 17 out of a backlash against planned carbon tax hikes, but has tapped into a broader frustration at the perceived squeeze in purchasing power and Mr Macron’s alleged indifference to the everyday struggles of ordinary citizens.
Many of the protesters have targeted Mr Macron personally, urging him to step down and attacking his background as an investment banker and economy minister.
On Saturday, “yellow vests” took to the streets in cities across France, including in Paris, but in far fewer numbers than on previous weekends: around 66,000 compared to 125,000 last Saturday.
Paris riot police fired tear gas and water cannons across the Champs-Elysees boulevard to disperse protesters.
In a bid to end the month-long standoff, Mr Macron has announced a package of radical measures for low-income workers to quell the revolt.
As well as cancelling the fuel tax increases that were due to kick in on January 1, a core demand of the protesters, he promised to increase the minimum wage by 100 euros (£90) from February and reduce taxes for cash-poor pensioners, among other measures.
The government has also announced a six-month consultation with civil society groups, mayors, businesses and key “yellow vest” figures to discuss tax and other economic reforms.
But the measures are expected to leave a 10 billion euro (£8.98 billion) hole in the Treasury’s finances, pushing France back over the European Union’s deficit limit of 3 per cent of national output and dealing a sharp blow to Mr Macron’s reformist credentials.
Mr Philippe confirmed to Les Echos that the deficit was expected to increase slightly in 2019 to reach 3.2 per cent of GDP.
To alleviate the financial pressure on the state, the government will limit the reduction in the corporate income tax rate to companies with a turnover of less than 250 million euros (£224.5 million) next year, Mr Philippe said.
“We will need to make savings of up to 1-1.5 billion euros,” he added.
The European Commission’s Vice-President Valdis Dombrovskis said last week that the bloc was “monitoring closely” the budget impact of the new fiscal measures.
The violent protests – eight people have died in incidents tied to the “yellow vest” movement, mostly from traffic accidents linked to roadblocks – have also helped drag down the young president’s approval rating.
A major poll of 1,943 people by Ifop published in Le Journal du Dimanche (JDD) weekly showed Mr Macron’s popularity had dropped by two percentage points in the last month, to 23 per cent.
The poll, conducted between December 7-15, showed his dissatisfaction rating had reached 76 per cent, up three points in one month.