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French government dissolved amid cabinet feud over economy French government dissolved amid cabinet feud over economy
(35 minutes later)
France has been thrown into a fresh political crisis after President François Hollande told his prime minister to form a new government, following criticism of his policies by the country's economy minister. France has been thrown into a fresh crisis after President François Hollande told his prime minister to form a new government following a show of insubordination by the country's economy minister.
Hollande ordered the prime minister, Manuel Valls, to form a new cabinet "consistent with the direction he has set for the country", the presidency said in a statement. It is the second reshuffle in five months as the ruling Socialists struggle to pull France out of the economic doldrums. The government is riven by infighting between left-leaning party members and supporters of the prime minister, Manuel Valls, who veer more to the centre.
It did not give any reasons, but the move came after the economy minister, Arnaud Montebourg, criticised the country's economic direction and its ally Germany at the weekend in a move that angered Valls. A statement from the presidency said Valls had offered the resignation of his government – a formality that allows him to form a new cabinet – and the new lineup would be announced on Tuesday.
While Valls himself has not reacted, his aides said on Sunday that Montebourg had crossed a line. "The head of state asked him (Valls) to form a team consistent with the direction he has himself set for the country," it said.
The presidency said the new cabinet lineup would be announced on Tuesday. The presidency did not give any reasons, but the move came after the economy minister, Arnaud Montebourg, angered Valls by criticising France's economic direction and the austerity policies of its ally Germany.
France has had effectively no economic growth this year and Hollande's approval ratings are in the teens. The country is under pressure from the European Union to get its finances in order, but Montebourg has questioned whether the austerity measures suggested by the EU will kickstart French growth. "You have to raise your voice. Germany is trapped in an austerity policy that it imposed across Europe," Montebourg said in an interview with Le Monde on Saturday.
Montebourg angered the Socialist leadership by saying "a major change in our economy policy" was needed from the president and prime minister. Then in a speech on Sunday, Montebourg said he had asked Hollande and Valls for a "major shift" in economic policy.
It countered by saying Montebourg's job was to support the government, not criticise it from within. "Given the seriousness of the economic situation, an economy minister has a duty to offer alternative solutions," he said.
"He's not there to start a debate but to put France back on the path of growth," Carlos Da Silva, the Socialist party spokesman, told Le Figaro. Valls, who has consistently said he will not tolerate any form of insubordination among his ministers, has not yet reacted.
But his aides said on Sunday that Montebourg had crossed a line, and while it is as yet unclear whether he will remain in the government, it appears increasingly unlikely.
The 51-year-old leftwing minister is no stranger to controversy, having made headlines in the past for his outspoken criticism of Germany, which he has blamed for factory closures in France.
He was promoted to his current position in April in a government shakeup after the Socialist party suffered a drubbing at local elections, and has had to cosy up to the finance minister, Michel Sapin, who supports the austerity measures.
As industrial renewal minister before his promotion, Montebourg had grabbed headlines by labelling the head of tyre giant Titan an "extremist" after the CEO criticised the French workforce as lazy.
He also became embroiled in a very public fight with steelmaker ArcelorMittal over the closure of a plant.
The latest reshuffle comes at a time when France is mired in stubbornly slow economic recovery and high unemployment. The central bank warned this month that Hollande had no hope of reaching his target of 1% 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% for this year.
Both Hollande and Valls say the answer is their so-called Responsibility Pact that offers businesses €40bn (£32bn) in tax breaks in exchange for a pledge by companies to create 500,000 jobs over three years.
Hollande plans to finance this with €50bn in spending cuts, which has angered those on the left of the party – including Montebourg – who argue that the focus should be on cutting taxes to boost consumer's spending power.