This is Paris. Today, let's talk about the recent protests in France that have been making headlines. The protests in France are being broadcast live around the world, and some of the looting scenes were quite shocking. However, from my perspective, it doesn't look easy for the French government to resolve this issue.
1. 100 Trillion Won Just in Annual Interest: Can the French Protests Be Resolved?
Let me explain through numbers why it is so difficult for the French government to solve this problem. There are various indicators, but let's break it down simply using government revenue and expenditure. Next year's projected revenue for the French government is 375.7 billion euros, which is about 563.55 trillion won. Almost all of this comes from tax revenue. So, what about the outgoing money, government expenditures? That amounts to around 548.9 billion euros, or about 833.35 trillion won. The anticipated deficit for next year alone is approaching 156.4 billion euros, or 235 trillion won. That shortfall will have to be covered entirely by selling government bonds and other means, all of which adds to the national debt. France already has a massive national debt, reaching about 5,400 trillion won. That is close to 120 percent of its GDP. The debt is so immense that rumors of a fiscal crisis are circulating. On top of that, an additional debt increase of over 200 trillion won is already scheduled for next year. France is now in a position where it has to pay more than 100 trillion won just in annual interest. With the country at risk of a potential default if things continue this way, the French government is trying to find a way to fix it. The solution comes down to one of two things: either increase revenue or cut expenditures. However, the tax burden rate for both corporations and individuals in France is already at the very top tier, placing it among the top three among OECD countries. Unlike South Korea, it doesn't have enterprises like Samsung Electronics or SK hynix suddenly earning massive profits to fill up the national tax coffers. Therefore, the government is trying to cut spending. Although this plan is currently faltering somewhat as the budget has yet to be finalized, the goal is to cut about 37 trillion won from next year's expected budget. Well, that was a bit long, but this is the current financial state of the French government.
2. No Place to Get Money? What About Taxing the Rich?
However, the students and labor unions currently protesting are demanding things that require substantial additional spending. Looking immediately at the demands of the students who triggered the current protests, they are asking for 15 trillion won to be poured into improving school facilities and hiring additional teachers to make up for shortages. When you factor in scholarships and living expense support on top of that, the figures snowball by trillions of won. Last Monday (October 26), the government announced plans to invest 1.5 trillion won annually into upgrading school facilities, but this falls far short of the scale demanded by students.
[Shannon Ongmilans / Student Union Spokesperson: If our demands are not met, we will take to the streets again, and we will restart the high school blockades.]
The government said it would cut 37 trillion won to reduce the national debt a bit, but simply accepting the students' demands alone would severely set back next year's targets. In addition, the demands made by general labor unions are all about increases: civil servant salary hikes, minimum wage increases, pension bumps, social benefit expansions, and so on. Even if we isolate civil servant salaries, France has twice the proportion of public servants compared to South Korea, which means public spending is correspondingly high. Accepting the unions' demand for a 10-percent wage increase as it stands would require an additional 35 trillion won. This shows that while money must be spent to resolve problems, the French government lacks the funds, making the issue extremely difficult to resolve. Observers note that rather than paying off or reducing this mountain of debt, things are poised to pile it up even higher. However, the students and labor workers staging these protests think entirely differently. They argue that instead of cutting expenditures, the government should increase revenues further. They contend that such revenue can easily be squeezed out of large corporations and the rich. There is what is called the "Zucman tax," designed by Professor Gabriel Zucman, which is a form of wealth tax. It proposes levying an additional 2-percent tax annually on the wealthy whose net assets exceed 100 million euros, or about 150 billion won. Protesters claim this would bring in an additional 200 trillion won per year. However, that 200-trillion-won figure is somewhat inflated, and synthesized research results suggest it would be around 40 trillion won. At any rate, since it would at least meet the government's reduction target, they are telling authorities to collect more from that source. Furthermore, they point out that since President Emmanuel Macron lowered corporate taxes to help businesses, those corporations should be made to pay up again now. From the perspective of students and labor workers, there are plenty of areas where government revenue can be increased. However, there is no way these wealthy individuals will willingly accept such a wealth tax, and companies, already facing high tax burdens, would desperately want to avoid any further liabilities.
3. Apple, Google, Meta, Amazon: A New Source of Cash?
Looking just at France's auto industry, more than 30 percent of jobs have disappeared since 2010, largely due to factories relocating overseas. Consequently, a new cash source sought out to avoid squeezing domestic companies too hard while securing fresh tax revenues has been major American global platform companies, which make massive profits in France while creating relatively few jobs. Apple, Google, Meta, Amazon, and other major global firms have already been hit with fines amounting to tens or hundreds of billions of won. However, these cases are tied up in lawsuits, so it remains uncertain how much money will ultimately flow into state coffers. Moreover, the U.S. government is unlikely to sit idly by and watch. This means things may not go entirely according to the French government's wishes.
To loop back, France has more expenditures than revenues, and its debt is far greater. The government is trying to cut spending to reduce debt, but citizens are protesting, demanding increased expenditures instead. They argue that revenues should be increased by collecting those taxes from the rich and corporations. Such positions remain sharply at odds.
4. The Presidential Election Is Approaching: Can Politics Resolve This?
This is precisely where politics is needed. Politics should drive social dialogue and compromise in times like this. Unfortunately, however, the French government lacks that political capacity. Macron's approval rating currently sits around 15 percent. Even with a 30-percent approval rating, people question whether a administration can command authority; how much political leverage can be exercised with a 15-percent approval rating? On top of that, a presidential election is scheduled for next April. Currently, the leading candidates in opinion polls are at the far-right and far-left extremes. Macron's words stand little chance of gaining traction. Consequently, even if the protesting groups are promised various concessions by the current government, they simply cannot believe them. All of these circumstances surround the protests unfolding in France. Therefore, taking all of these factors into account, I cannot shake the thought that, as I mentioned at the outset, France has very little capacity to resolve its current turmoil.
(Reported by Kwon Yeongin | Produced by Shin Hee-suk | Video by Kim Si-nae | Video Editing by Hong Jin-young | Design by Yang Hye-min | Produced by SBS Digital News)
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