French government reshuffle: President Hollande ejects opponents of economic reforms in new ‘clarified’ cabinet

Vocal opponents of austerity have been purged, but will this be the last throw of the dice for the least popular administration since 1958?

François Hollande and his new government will be trying to reinvent a French left and centre-left (Getty Images)

A new government without a natural majority in parliament and little popular support will attempt over the next two years to impose the economic reforms which France has resisted, or skirted, for two decades.

Officially, the administration that took office tonight – the fourth government of François Hollande’s 27-months-old presidency – will be a band of like-minded brothers and sisters loyal to the courageous, reformist line of the President and his Prime Minister, Manuel Valls.

Looked at another way, it will be a narrow, unrepresentative administration trying to impose complex political and economic choices on a querulous country – and a traditionalist left – which thought that it had voted for a radically different approach in 2012.

Over the next couple of years, Mr Hollande, Mr Valls and their new governing team will be trying to scale back the sprawling French state, redraw the French administrative map, reduce the payroll tax burden of business, rekindle growth and reverse the relentless rise of unemployment.

As if that were not enough, they will also be trying to reinvent a French left and centre-left which remains largely hostile to the market-friendly “social democratic” choices belatedly made by Mr Hollande (in the wake of almost every other large centre-left party in Europe).

Such multiple tasks would be daunting for a popular president and a popular government. After two years of muddle and hesitation, and poor economic results, President Hollande is mired at 17 per cent in the opinion polls – the lowest score of any president in the Fifth Republic (since 1958). His Prime Minister, Manuel Valls, is also beginning to plunge in the polls as the French economy flatlines and unemployment creeps beyond 10 per cent.

The new government will be hostage to the whims of a narrow Socialist parliamentary majority, which includes from 40 to 50 “supporters” of the weekend’s anti-austerity tirade by the Economy Minister Arnaud Montebourg. He and two other high-profile, left-wing ministers – Benoît Hamon and Aurélie Filipetti – were purged from the “clarified” government team announced on Wednesday.

A Hollande loyalist, the Finance Minister, Michel Sapin, 62, will absorb much of Mr Montebourg’s economic policy portfolio. A non-elected senior Élysée Palace official, Emmanuel Macron, 37 – regarded as a right-winger – becomes Economy and Industry Minister.

A Moroccan-born, rising star of the French left, Najat Vallaud-Belkacem, 36, becomes the youngest ever French Education Minister and the first woman to hold the post.

Another young woman of non-French origin, Fleur Pellerin, 41, who was adopted from South Korea as a baby, is promoted to Culture Minister. Patrick Kanner, 47, deputy mayor of Lille, become Sports Minister.

In a day of difficult negotiations, the Greens, a small left-wing party, and at least one Socialist ex-minister refused to join the new Valls team. All other senior posts remained unchanged.

In theory, the new government is extremely fragile. It has no natural majority in the National Assembly if the Socialist dissidents – or traditionalists – rebel. Only the certainty of left-wing wipe-out in an early parliamentary election will prevent the Socialist rebels from bringing the government down when critical budgetary votes come due next month.

All the same, accidents do happen.

The fate of the new government – Valls II – also depends on the fears and political calculations of the main centre-right opposition party, the Union pour un Mouvement Populaire (UMP). Leaderless and divided, the last thing that the UMP wants is to fight, and probably win, an early parliamentary election which would plunge it into an unpopular “co-habitation” with President Hollande until the next presidential election in May 2017.

Here too, accidents might happen.

Over this shattered political and economic landscape looms the baleful presence of Marine Le Pen’s “de-demonised” Front National. Based on the strong NF performance in local and European elections in the spring, an early legislative election, in say 2015, could give the French far-right a large bloc of seats in the National Assembly for the first time.

How did it come to this? The fault is not just that of François Hollande. Ever since 1995-96, when Jacques Chirac abandoned his brief attempts to reform pensions and welfare and restore French competitiveness, successive governments have baulked at most of the hard choices.

Nicolas Sarkozy came to power in 2007 promising much. He delivered little before he was swamped by the world financial crisis of 2008-9. Mr Hollande defeated him in 2012 by promising to cut deficits mostly by raising taxes on the rich, to generate growth and jobs and to make “big finance” his enemy.

After 19 months of tax rises and rising unemployment, Mr Hollande switched direction in January to his “competitiveness pact” – a long overdue easing of the payroll tax burden on French industry in return for the promise of the creation of thousands of new jobs.

Eight months later this pact is still being negotiated with unions and employers. Mr Hollande and Mr Valls are reversing some tax rises and trying to take a €50bn axe to the French state over three years. They are committed to simplifying and reducing French bureaucracy by, amongst other things, reducing the number of regional governments from 22 to 12.

Outgoing ‘anti-austerity’ rebels: Arnaud Montebourg, Benoit Hamon, Aurélie Filippetti (Getty) (Getty Images)

In his tirade at the weekend, Mr Montebourg did not reject all these policies. He objected to the rapid, EU-imposed pace of the cuts in state deficits all over Europe, which he blamed on the “kafkaesque” right-wing “dogma” of the German Chancellor Angela Merkel. Some of the savings in France, he said, should be spent instead on boosting the purchasing power of ordinary people through tax cuts and welfare rises.

Mr Montebourg’s timing was strange. The French government was already heading broadly in this direction. Mr Hollande planned – and doubtless still plans – to try to persuade Ms Merkel and Brussels to cut him some more deficit-cutting slack next month. The European Central Bank is already moving towards a form of “quantitative easing” to revive the eurozone economies – another key Montebourg demand.

By making a direct attack on Ms Merkel, Mr Montebourg was, in effect, making a dramatic resignation speech without resigning. Other Socialist politicians assume that he had concluded that the Hollande-Valls government was doomed to fail. He decided that it was the right time to position himself to become the “Next Big Thing” on the French left.

Mr Montebourg may be right about the pace of the deficit cuts. He may be right about Mr Hollande’s chances of pulling his presidency from the fire. The self-serving nature of his departure is a reminder that, over two decades at least, France has frequently been let down by narrow, short-term, egotistical and electorally-driven choices by its mainstream politicians.