January 24, 2019 / 3:29 PM / 7 months ago

Breakingviews - The "gilets jaunes" invade Davos if only in spirit

Protesters wearing yellow vests, a symbol of a French drivers' protest against higher diesel taxes, attend a demonstration on the Champs-Elysees avenue in Paris, France, December 1, 2018. REUTERS/Stephane Mahe - RC170E27DE10

DAVOS, Switzerland (Reuters Breakingviews) - Davos 2019 has a jaundiced hue – that is, the color of the vests worn by protesters rocking Paris every weekend. The gripes of the “gilets jaunes” should be familiar to attendees at the World Economic Forum, who have gabbed over income inequality regularly since the financial crisis. What’s different now is the specter of widespread social unrest – even violence.

The images of burning Citroens and smashed ATMs on the Champs-Elysées have made clear to Davos man and woman that panels with bank bosses and economists will not guarantee stability. That’s why at least one of the few developed-country bosses who made the trek was worth listening to: Giuseppe Conte, Italy’s newest prime minister. 

Not many people did. His speech on Wednesday was thinly attended. Some of his country’s own business leaders skipped the address. One described Conte - who was chosen six months ago as a compromise candidate by the two anti-establishment parties that won elections last spring - a “marionette” guided by Matteo Salvini, the leader of the League, who did not come to Davos.

That’s a pity, because Conte’s administration is the closest thing to an elected “gilet-ist” government. Policies put forward by Rome to address the gaps in wages and opportunities between the urban rich and less-well-off rest go further than those of nearly anywhere else in the rich world, including an income-support program targeting 5 million Italians living in poverty.

Conte and his backers may appear rough around the edges, particularly with their approach to migrants. But their domestic mission is clear: “Financial stability is very important, but more important is social stability and working...for the needs of the people,” Conte told Reuters and Breakingviews. “Give me one or two years, and you will find another Italy.”

The Florentine law professor’s debut presented a stark contrast with French President Emmanuel Macron’s a year ago. After diverting the private jets of 140 global CEOs to Versailles on their way to Switzerland, Macron triumphantly declared France open for business.

Macron stayed home this year, but his finance minister, Bruno Le Maire came. And his message might’ve well come wrapped in a yellow vest. When France presides over the G7 in August, it will force the club of wealthy nations to focus on fairness, including a minimum global corporate tax. While unity in this area is hard to achieve even at European Union level, the gilets jaunes are in the WEF house.


Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

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