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French green tax won't come back without consensus -PM

Source: Reuters - Fri, 13 Dec 2013 02:29 PM
Author: Reuters
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* Green tax caused violent protests in northwestern France

* PM says suspended tax will not return without consensus

PARIS, Dec 13 (Reuters) - The French government will not resurrect a controversial green tax that was suspended following violent protests unless a political consensus is reached on how to apply it, Prime Minister Jean-Marc Ayrault said on Friday.

The Socialist government last month froze its plans for the tax on trucks following protests by farmers and truckers in northwestern France, who clashed with police and torched dozens of toll gates designed to collect the levy.

Ayrault ordered a parliamentary commission to examine the so-called eco-tax, which was meant to raise nearly 1 billion euros ($1.4 billion) per year through automatic levies on trucks, but did not set a deadline for its implementation.

"The eco-tax will come back if there is a consensus," he told France Bleu Armorique radio.

"That's why I proposed that the National Assembly, which had voted unanimously in favour of the law, be put in charge of evaluating it and finding a solution."

Parliament originally passed the law under the previous conservative administration, but President Francois Hollande has faced the brunt of anger from Brittany farmers and truckers who say the tax will rob them of their livelihood.

If the government gave way on the green tax, it would add to a list of scrapped tax rises including a levy on corporate profits and new charges on special savings products, fuelling accusations that Hollande lacks authority as a leader.

The protests led by groups wearing red bonnets, a reference to 17th century peasant revolts, were the toughest since Hollande came to power in May 2012 and imposed tax hikes to shrink the public deficit under pressure from European partners.

While a similar tax exists in Germany, and France's government says its main aim was to tax foreign trucks travelling through France, protestors argue it will destroy more jobs in the region's beleaguered food processing industry.

Protests caused hundreds of millions of euros in damage, while the government may face an 800-million-euro penalty if it breaches its contract with a company hired to collect the tax.

Leaders of the 'red bonnet' movement told French media they were determined to see the tax buried, despite an offer from the government to reduce it by 50 percent.

($1 = 0.7271 euros) (Reporting By Pierre-Henri Allain; Writing by Nicholas Vinocur; Editing by Catherine Evans)

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