France throws out "picnic tax"

ROME (Reuters) - France has dropped plans to introduce a so-called “picnic tax”, French Prime Minister Francois Fillon said on Thursday, looking to head off controversy over the eco-friendly measure.

A man holds a basket with plastic plates and glasses in a supermarket in Nice, southeastern France, September 18, 2008. REUTERS/Eric Gaillard

The French environment minister announced on Monday the government was going to increase taxes on throwaway plates, cups and cutlery to encourage people to buy recyclable products.

Opposition politicians dubbed it the “picnic tax” and said the government should be hiking levies on rich people rather than penalizing ordinary people enjoying a day out.

Embarrassed by the bad publicity, Fillon immediately pulled the plug on the project.

“There will be no new tax,” he told reporters on a visit to Italy. “There is no picnic tax.”

French President Nicolas Sarkozy was elected in 2007 promising to reduce taxes and introduced a package of cuts worth 7.7 billion euros ($11.17 billion) shortly after taking office.

However, he has subsequently introduced more than 10 new levies to pay for other campaign promises, including taxes on the Internet, telephone and USB keys, making him and his government an easy target for the opposition.

Fillon’s move on Thursday is a setback for Environment Minister Jean-Louis Borloo, the number two in the government who has staked much political credibility on his drive to make France a more environmentally-friendly economy.

To do that, Borloo wanted to extend a tax system already applied to cars which imposes hefty levies on the most heavily polluting vehicles while the greenest get a tax break.

French newspaper Le Figaro said this week that beside the picnic tax, the government had agreed on a list of new items that could be included, such as fridges, washing machines, televisions, batteries and wooden furniture.

But Fillon denied this. “There is no list,” he said.

Reporting by Sophie Louet, writing by Crispian Balmer