Open feud in French government over economy

SHAFAQNA (Shia International News Association) – French President has started the second major changes of his beleaguered Socialist government within six months following an internal revolt by leftwingers led by Arnaud Montebourg, the economy minister. Hollande asked Manuel Valls, the reformist prime minister, to form a new government, to be announced on Tuesday, that will almost certainly exclude the rebellious Mr Montebourg and other leftwing sympathisers in the cabinet.

The dramatic events followed a call by Mr Montebourg at the weekend for a “major change” in economic policy away from austerity, and sharp criticism of what he called the imposition on Europe of “the most extreme orthodoxy of the German right”. He was joined in his criticism by Benoît Hamon, education minister, who said he and Mr Montebourg were “not far” from a group of rebels in the socialist parliamentary party who have mounted a campaign against Mr Hollande’s shift to a pro-business, supply-side economic policy.

Hollande insisted last week he would not change policy, but Montebourg and others on the left quickly began to demand moves to spur demand and an abandonment of France’s commitment under EU fiscal rules to budget deficit reduction targets. Hollande has stuck firmly to a policy he first announced in January, known as the responsibility pact, that places the emphasis on supply-side reforms aimed at restoring business confidence and prompting much-needed employment growth.

Source: FT



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