Greens plunge government into crisis for caving in on fuel

Prime Minister's gamble on £100m package of tax breaks backfires
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After 10 days of rebellion and intermittent chaos over high oil prices, France was on the brink of a full-blown political and economic crisis last night.

After 10 days of rebellion and intermittent chaos over high oil prices, France was on the brink of a full-blown political and economic crisis last night.

The Prime Minister, Lionel Jospin, issued a stern public warning that the government would make no more concessions. Lorry owners have rejected a generous package of fuel tax cuts and extended their siege of oil refineries indefinitely.

At the end of its third day, the oil blockade by truck drivers, farmers and private ambulances had begun to disrupt everything from car travel to internal air flights, school buses and school meals, with the threat of worse to come.

Mr Jospin - also faced with a counter-revolt by his Green coalition partners against cuts in taxes on diesel fuel - appeared to have lost control of events. He had gambled on buying off the truck owners.

A settlement seemed briefly possible until hardliners on the refinery barricades forced two of the three lorry owners' federations to reject a £100m package of tax breaks. The dealhad been negotiated and welcomed by the truck drivers' own leaders.

Senior Green politicians, who had been promised gradual increases in diesel taxes, were meeting last night to decide whether to pull out of the coalition government if the lorry owners were given any more concessions.

Mr Jospin was left with no choice but to take a belated tough line and appeal for public support against the protesters. He took the unusual step last night of making a public statement from the steps of the Matignon palace, his official residence, warning the truck owners that there would be "no more negotiations".

He appealed to them to show "responsibility" before serious damage was inflicted on the French economy.

"I want to state quite clearly that the government will go no further," Mr Jospin said.

The revolt against high oil prices - which began with a fishermen's blockade of French ports last week - has now spread to an eclectic gathering of small businessmen, ranging from truck drivers and farmers to taxis, coaches, private ambulances, funeral directors, barge owners and crane operators. All are demanding tax cuts or other subsidies to match the compensation for high oil prices given to the seamen last week.

To sharpen the French government's misery, world oil prices, already at a 10-year high, continued to rise yesterday.

Although the Paris area remains relatively untouched - thanks to police guards on oil depots - severe shortages of petrol, official rationing and requisitioning spread to more than half the 94 départements of mainland France yesterday. Outside the capital, the authorities made no attempt to break the stranglehold on refineries and fuel depots imposed by truck drivers and farmers on Sunday night.

Flying pickets of truckers yesterday intercepted, with complete impunity, petrol tankers from the Paris area and prevented them from resupplying service stations in other parts of the country. School bus services - and even school meals in the Vosges département in eastern France - were disrupted on the second day of the new school year.

Regional airports in Nice, Lyon and Alsace began to cancel internal flights for lack of aviation fuel.

Coaches and lorries assembled in "slow-rolling blockades" in many parts of the country, including the busy Porte Maillot entrance to Paris. Taxi owners plan to bring to a standstill traffic in the capital and other large cities today.

The Jospin government had gambled on reaching an agreement with the truck owners, which would dismantle the refinery blockades and make the farmers and other grumblers easier to pick off one by one. The Transport Minister, Jean-Claude Gayssot, appeared to have struck a £100m deal in the early hours of yesterday, which would have given the truck owners tax breaks on diesel fuel worth £1,700 per lorry per year - plus the promise of more tax concessions in the years ahead.

Leaders of the three federations of truck owners welcomed the deal and promised to urge their members to end this dispute.

By midday, when the agreement was supposed to be signed, the federations representing small and medium-sized truck companies had performed a U-turn under pressure from their members on the barricades. Only one federation, representing the big trucking companies, signed the agreement and ordered its lorries back on the road.