France’s Hollande orders cabinet reshuffle amid economy row

August 25, 2014
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French president Francois Hollande gives a press conference to present his 2014 policy plans, on January 14, 2014 at the Elysee presidential palace in Paris/AFP
French president Francois Hollande gives a press conference to present his 2014 policy plans, on January 14, 2014 at the Elysee presidential palace in Paris/AFP

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.

It did not give any reasons, but the move comes after Economy Minister Arnaud Montebourg spent his weekend bad-mouthing the country’s economic direction and 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.

This put Montebourg at loggerheads with Hollande, with the French president saying this week he did not want to see France go “head to head” with Berlin.

Gowth vs austerity

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.

“I hope that we can convince our European partners to make growth a priority,” Hollande said Saturday at a press conference during a visit to the Comoros when asked about the economy minister’s comments to Le Monde.

“Everyone who shares that idea is welcome, it is the position of the government.”

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

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 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.

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