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Tuesday, Aug 26, 2014

World

France awaits new government after shock resignation

AFP | Tuesday, Aug 26, 2014

France's President Francois Hollande (R) and Prime Minister Manuel Valls (L) at the Elysee presidential palace in Paris.

PARIS - France was set to unveil a new cabinet Tuesday, after the shock resignation of the government amid a row over economic policy plunged the country into deep crisis.

Already battered by record unemployment and an economy at a standstill, the deeply unpopular President Francois Hollande is using the reshuffle to reassert his authority over his feuding Socialist Party.

The crisis was sparked by a weekend of sniping by economy minister Arnaud Montebourg, a left-wing firebrand well known for outspoken views, over austerity policies implemented by Paris that he blamed for the worst crisis in Europe and France since the 1929 Great Depression.

Hollande called Tuesday for a government "of clarity" that will toe the line, after Montebourg took two other left-wing rebels, culture minister Aurelie Filippetti and education minister Benoit Hamon, with him.

Leading daily Le Monde said: "The political return from holiday was already looking difficult for the president and the prime minister. In a few hours, it became explosive." It described the cabinet reshuffle, expected to be unveiled later on Tuesday, as "the last chance for the president to save his five-year term." Hollande and Prime Minister Manuel Valls were putting the finishing touches to the reshuffle over lunch and the new government was expected to be announced later in the afternoon on Tuesday.

"It will not be a big reshuffle," said government spokesman Stephane Le Foll.

Sources at Hollande's Elysee Palace office told AFP that he had decided on a complete reshuffle rather than dismissing the rebels in a bid to "ensure that the new government is completely and consistently on the direction fixed by the head of state."

Parting shot

Hollande stressed in an interview with Le Monde last week that France should go "faster and further" with economic reforms he hopes will pull the country out of the morass.

He is pinning his hopes on the Responsibility Pact, a 40-billion-euro package of reductions in social charges for businesses in return for a pledge to create 500,000 jobs by 2017.

With France's public debt under scrutiny from the European Union, Hollande intends to finance this with 50 billion euros of cuts in public spending, drawing the ire of leftists like Montebourg, who took a parting shot at austerity measures in a final statement.

"For two years, I fought tirelessly to convince, I wrote notes and letters to the head of the executive and made private and public declarations to attempt to convince and implore the president to refuse excessive measures for our country that risked damaging and sinking our economy," he said.

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