Wednesday, 24 March 2010

France shelves carbon tax plan

France's government put on hold a key carbon tax plan as workers held mass strikes over pensions and jobs, turning up the heat on President Nicolas Sarkozy after an election humiliation.

Published: 7:00AM GMT 24 Mar 2010
The government shelved the proposed carbon tax, one of Mr Sarkozy's key reforms, a day after the president replaced a top minister in a reshuffle after his UMP party's defeat by Left-wing rivals in regional elections.
Hundreds of thousands of protesters marched in the streets and teachers, train drivers and other public workers stayed off work to protest job cuts and plans for pension reform.

The president has vowed to press on with changes to state pensions. But the carbon tax, a major plank of his environmental policy touted as France's leading contribution to anti-global warming efforts, was put on hold.
Prime Minister Francois Fillon said in a statement that the government still aimed to implement a carbon tax but this could only be done "in common with other European countries" and France would push the EU to take a common position.
The UMP leader in parliament, Jean-Francois Cope, said after a meeting with Mr Fillon that the tax will not be introduced in July as planned "unless there is a European accord."
The plan would have made France the first big economy to tax harmful carbon emissions, aiming to encourage French consumers to stop wasting energy. But business lobbies feared it would penalise French industry.
Mr Fillon said the tax would have to work at a European level so as "not to harm the competitiveness of French companies," according several UMP deputies who met with him in parliament.
"The decisions we take on sustainable development must be better co-ordinated with all European countries so as not to deepen our competitive disadvantage with our neighbour Germany," they quoted him as saying.
The strikes on Tuesday disrupted train services and schools while angry public sector employees marched in Paris, Marseilles, Bordeaux and other French cities, police and organisers said.
France's biggest union, the CGT, said 800,000 people took part in protest marches held in dozens of cities across the country, while police put the figure at 380,000.