Hollande ally replaces rebel economy minister in new French government

Hollande on Monday ordered Prime Minister Manuel Valls to form a new cabinet "consistent with the direction [Hollande] has set for the country", the presidency said in a statement on Monday.

Valls appointed Macron, 36, to replace economy minister Arnaud Montebourg, whose strong statements over the weekend criticising the economic policies of Hollande's government prompted the cabinet reshuffle.

Macron, a former Rothschild banker, was a Hollande economic adviser until June and is known for his pro-business ideas. His appointment may be aimed at sending a signal to France's partners in the European Union and in business circles.

Those remaining in their government posts include Finance Minister Michel Sapin, Foreign Minister Laurent Fabius, Defence Minister Jean-Yves Le Drian, Interior Minister Bernard Cazeneuve, Justice Minister Christiane Taubira, Agriculture Minister Stéphane Le Foll, and Ecology and Energy Minister Ségolène Royal.

Najat Vallaud-Belkacem, the former minister of health and women's rights, was named education minister to replace Benôit Hamon, who along with Montebourg had spoken out against the government's policies.

Fleur Pellerin, secretary of external commerce and tourism, was named to replace Aurélie Filippetti as culture minister. Filippetti, who had also voiced her support for Montebourg, resigned on Monday. In an open letter to the current government published in Le Monde, she said she remained loyal to Hollande and Valls but stressed that France’s economic policies should remain open to debate.

Rounding out the new administration is François Rebsamen as minister of work and employment, Sylvia Pinel as minister of housing and rural affairs, Marylise Lebranchu as minister of public services, Patrick Kanner as youth and sports minister, George Pau-Langevin as minister of French overseas territories, and Marisol Touraine as minister of health and women's rights. 

Hollande's office on Tuesday said the president was seeking renewed "clarity" with the new government. Sources at the Elysée Palace told AFP that he had decided on a partial cabinet reshuffle rather than simply dismissing the dissenters to "ensure that the new government is completely and consistently [headed] in the direction fixed by the head of state".

Rebel in the ranks

Montebourg was forced to step down as France’s economy minister after publicly criticising the government’s austerity policies over the weekend. He told daily newspaper Le Monde on Saturday that France should not be "pushed around" by Berlin. "Germany is trapped in an austerity policy that it has imposed across Europe," he said.

Then in a speech on Sunday, Montebourg said he had pushed Hollande and Valls to make a "major shift" in economic policy. "Given the seriousness of the economic situation, an economy minister has a duty to offer alternative solutions," he told Socialist Party supporters at a rally in eastern France.

An advocate of cutting taxes and increasing government spending, Montebourg told reporters on Monday that he would not seek a position in the new cabinet – lashing out again at the government's policies in some of his final remarks as economy minister.

"The entire world is urging us – even begging us – to end these absurd austerity policies that are plunging the eurozone into an economic slowdown,'' he said in a statement to the press.

"My responsibility as economy minister is to tell the truth, and observe ... that not only are these austerity policies not working but they are also unfair."

Hollande's struggles

This forced government reshuffle was further bad news for Hollande, a Socialist, who is already struggling with record-low approval ratings. Hollande is the most unpopular president in the history of France's Fifth Republic, with approval ratings below 20 percent.

Now halfway through his five-year term, Hollande has also failed to curb France's record unemployment or its ballooning debt, prompting a growing number of people on the left of his Socialist Party, like Montebourg, to question the soundness of his economic strategy.

France’s economy has stagnated for the past six months, and the government has had to cut its growth forecast to 0.5 percent for this year, half of the already modest estimate it had previously given for 2014.

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

Hollande plans to finance the programme with €50 billion in spending cuts, but the plan has angered those on the left of the party – like Montebourg – who argue that the focus should be on cutting taxes to boost flagging consumer spending.

The departing Montebourg acknowledged that he had failed to convince Hollande and Valls that the austerity measures they have implemented were misguided, but insisted that he was leaving on good terms with both men.

(FRANCE 24 with AP and AFP)