Monday

23rd Jan 2017

French government in turmoil over economic policies

  • French PM Valls, a moderate Socialist, out-manoeuvered the more left-wing ministers (Photo: partisocialiste)

French Prime Minister Manuel Valls on Monday (25 August) tendered his government's resignation after more leftist ministers voiced criticism to what is being perceived as German-imposed austerity.

The embattled French President, Francois Hollande, whose popularity ratings are only 17 percent, accepted the resignation and tasked Valls to form a new cabinet by Tuesday, the Elysee palace said in a press release.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

"The head of state has asked him [Valls] to form a team in line with the orientation he has defined for our country," the statement added - a reference to further budget cuts needed for France to rein in its public deficit.

The rebel minister, Arnaud Montebourg, who had held the economy portfolio until Monday, over the weekend criticised his Socialist government for being too German-friendly.

"France is a free country which shouldn't be aligning itself with the obsessions of the German right," he said at a Socialist rally on Sunday, urging a "just and sane resistance".

The day before, he gave an interview to Le Monde in which he claimed that Germany had "imposed" a policy of austerity across Europe and that other countries should speak out against it.

Two more ministers, Benoit Hamon in charge of education and culture minister Aurelie Fillipetti, also rallied around Montebourg and said they will not seek a post in the new cabinet.

In a resignation letter addressed to Hollande and Valls, Fillipetti accused them of betraying their voters and abandoning left-wing policies, at a time when the populist National Front is gaining ground everywhere.

According to Le Parisien, Valls forced Hollande to let go of Montebourg by telling him "it's either him or me." Montebourg was promoted from industry to economy minister earlier this year in a bid to appease the left-wing within the Socialist party.

Valls, who has been prime minister only since March this year after another reshuffle following a disastrous result in local elections, is expected to keep more centrist ministers and Hollande loyalists in his new cabinet, including finance minister Michel Sapin.

But apart from internal power struggles, the government turmoil is also a sign of diverging views on how to tackle the country's economic woes.

French unemployment is at nearly 11 percent and growth in 2014 is forecast to be of only 0.5 percent.

Meanwhile, French officials have already said the deficit will again surpass EU's 3 percent target, and are negotiating another delay with the European Commission.

The commission declined to comment on the new developments in France, with a spokeswoman saying they are "aware" and "in contact" with the French government.

German chancellor Angela Merkel on Monday during a visit to Spain declined to comment directly about the change in government, but said she wishes "the French president success with his reform agenda."

Both Merkel and Spanish PM Mariano Rajoy defended the need for further austerity and economic reforms, saying this boosted economic growth.

Since the start of the eurozone debt crisis in 2010, Merkel and her government were seen as the main drivers for harsh austerity measures imposed on southern countries in return for loans needed to avoid bankruptcy.

Hollande and Italian prime minister Matteo Renzi have been especially vocal in calling for a shift from austerity to more growth-friendly spending policies.

The head of the International Monetary Fund, Christine Lagarde, a former French finance minister, also waded into the debate on Monday, saying Germany should spend more in order to help the recovery of the eurozone as a whole.

"What I think is very important for Germany is to participate in the recovery movement in a very intense way. It has the means to do so," she told Swiss public broadcaster RTS.

Brexit men launch anti-EU website

Westmonster, modelled on hard-right US websites, said it was: "Pro-Brexit, pro-Farage, pro-Trump. Anti-establishment".

Stakeholders' Highlights

  1. Caritas EuropaEU States to Join Pope Francis’s Appeal to Care for Migrant Children
  2. UNICEFNumber of Unaccompanied Children Arriving by sea to Italy Doubles in 2016
  3. Nordic Council of Ministers"Nordic Matters" Help Forge Closer Bonds Between the UK and the Nordic Region
  4. Computers, Privacy & Data ProtectionThe age of Intelligent Machines: join the Conference on 25-27 January 2017
  5. Martens CentreNo Better way to Lift Your Monday Blues Than to Gloss Over our Political Cartoons
  6. Dialogue PlatformThe Gulen Movement: An Islamic Response to Terror as a Global Challenge
  7. European Free AllianceMinority Rights and Autonomy are a European Normality
  8. Swedish EnterprisesHow to Create EU Competitiveness Post-Brexit? Seminar on January 24th
  9. European Jewish CongressSchulz to be Awarded the European Medal for Tolerance for his Stand Against Populism
  10. Nordic Council of Ministers"Adventures in Moominland" Kick Off Nordic Matters Festival in London
  11. PLATO15 Fully-Funded PhDs Across Europe on the Post-Crisis Legitimacy of the EU - Apply Now!
  12. Dialogue PlatformInterview: Fethullah Gulen Condemns Assassination of Russian Ambassador to Turkey