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France’s Hollande orders cabinet reshuffle amid economy row

© Bertrand Guay, AFP | French President François Hollande

Text by FRANCE 24

Latest update : 2014-08-25

France was thrown into fresh crisis on Monday after President François Hollande asked his prime minister to form a new government following an open feud within his cabinet over the country’s economic direction.

The president 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.

The statement did not cite a reason for the move, but it comes after Economy Minister Arnaud Montebourg spent his weekend slamming the country's economic direction, as well as close ally Germany, in a much-criticised show of insubordination.

On Saturday, Montebourg told daily newspaper Le Monde that France would no longer "be pushed around" by Germany.

"You have to raise your voice. Germany is trapped in an austerity policy that it imposed across Europe," the Socialist minister said.

Then in a speech on Sunday, Montebourg said he had asked Hollande and Valls for 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.

Montebourg told reporters on Monday that he would not seek a position in the new government, 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."

The key question for Valls in deciding who stays and who goes in the cabinet reshuffle will be where the ministers stand on Hollande’s economic policies, said FRANCE 24's Cyril Vanier. All those who support his policies, including the foreign and interior ministers, will likely continue in their roles. But for Valls, it is simply logical that those who have been critical “will not be part, cannot be part, of the government”, Vanier said.

Those preparing to leave their posts include the culture minister, Aurélie Filippetti, who has expressed support for Montebourg. Filippetti said in an open letter to the current government on Monday that her loyalty is not in question, but stressed that France’s economic policies must remain open to debate.

Austerity vs growth

FRANCE 24's Armen Georgian reports on French government reshuffle

This open insubordination from Montebourg, who has significant support on the party’s disgruntled left, put him at loggerheads with Hollande, who said last week France should not go “head to head” with Berlin.

Since the start of the eurozone debt crisis in 2010, Germany has been accused of leaving its EU partners in the lurch by failing to do more to kick-start growth.

Earlier this month, Berlin snubbed a request from France’s Hollande for an EU-wide economic policy shift in order to encourage growth.

"I hope that we can convince our European partners to make growth a priority," Hollande said Saturday when asked about Montebourg’s comments, in a clear effort to downplay the dissent.

“Everyone who shares that idea is welcome, it is the position of the government,” Hollande added, suggesting there was a consensus in the government on the issue of growth versus austerity.

However, despite Hollande’s conciliatory comments, it was clear by the following morning that Montebourg had gone too far with his open criticism of the government and its failure to stand up to Germany.

Line crossed

Valls aides on Sunday told journalists that Montebourg had crossed a line in speaking out against the government’s economic policies.

In his interview with Le Monde, Montebourg also criticised Germany – without mentioning it by name – for its role in helping the European Central Bank determine eurozone monetary policy.

"Today, unfortunately, the hawks... fight inflation when it disappears while forgetting to fight the essential problems such as widespread unemployment," the popular economy minister said.

On Monday morning, Montebourg told Europe 1 that he “did not regret” speaking out and insisted he had not broken ranks with the government.

He also repeated his comments to the press that France had to move away from austerity policies and focus instead on growth and reducing unemployment.

The country is mired in a stubbornly slow economic recovery and the central bank warned this month that France had no hope of reaching Hollande’s target of 1.0-percent growth for 2014.

(FRANCE 24 with AFP)

Date created : 2014-08-25

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