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France

New French government to be annouced on Tuesday

media President Francois Hollande, Prime Minister Manuel Valls Reuters/路透社

The announcement of a new French cabinet tomorrow will be the second reshuffle in just five months.

President Hollande’s acceptance of the resignation of the Valls government is a formality which allows Prime Minister Manuel Valls to re organise his cabinet, almost certainly replacing dissident Economy minister Arnaud Montebourg and possibly other cabinet members from the left wing of the Socialist party.

Amid rumours that Manuel Valls threatened to resign if he could not replace rebel ministers, president Hollande’s office issued a statement insisting that president and prime minister were in total unity over the direction the government should take and the decision to set up a new cabinet.

Although the resignation caught many political commentators by surprise this morning, it is only the latest manifestation of disagreement within the cabinet over how to cut the French deficit, kickstart the economy and reduce the record number of unemployed.

When in Saturday’s publication of Le Monde, no less than the Economy Minister himself, Arnaud Montebourg, openly criticised the economic direction being taken by the government, it was the final straw for Hollande and Valls who were already trying to contain a growing revolt among their own Socialist parliamentarians, whose voters feel betrayed by the president’s swing to the right on economic issues.

Montebourg went further on Sunday, announcing in a speech that he had asked Hollande and Valls for a "major shift" in economic policy.

Among opposition politicians quick to react on Monday to the government’s resignation, far-right leader Marine Le Pen called for the lower house National Assembly to be dissolved.

Meanwhile Valls is spending the day trying to form a new cabinet, composed perhaps of some new faces but also previous cabinet members who pledge to tow the government line.

The latest reshuffle follows a central bank warning earlier this month that Hollande had no hope of reaching his target of 1.0 percent growth for 2014.

The French economy has been stagnant for the past six months and the
government was forced to halve its growth forecast to 0.5 percent for this year.

Both Hollande and Valls say the answer is their so-called Responsibility Pact that offers businesses tax breaks of some 40 billion euros in exchange for a pledge by companies to create 500,000 jobs over three years.

Hollande plans to finance this with 50 billion euros in spending cuts buy Monterbourg and others on the left of the party argue that the focus should be on cutting taxes to boost consumers' spending power.

Frederic Dabi, deputy head of polling firm IFOP, acknowledged that the reshuffle cold
further weaken Hollande within the Socialist party.

"But I wouldn't overestimate the impact on public opinion," he said. "We have a government and president that are historically unpopular, and what will make them popular or more unpopular isn't what happens in the government in terms of people but policies being implemented and a lack of results."

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