New team unveiled in French reshuffle as rebel ministers dropped

President François Hollande replaced his maverick leftist economy minister with a former Rothschild partner yesterday, in a reshuffle intended to reconcile his efforts to revive the stagnant French economy with deficit-cutting orthodoxy. 

New team unveiled in French reshuffle as rebel ministers dropped

The shake-up is the latest episode in the wrangling across Europe about how much budgetary rigor the region’s economies can bear as they recover from financial crises.

Arnaud Montebourg, ejected from the economy ministry post on Monday after a tirade against German-enforced “austerity” was replaced by Emmanuel Macron.

Macron, a former merchant banker, acted as Hollande’s top economic adviser until June. He was widely known in business circles as their “ear” at Hollande’s presidential palace, otherwise largely packed with technocrats.

The new cabinet makes its debut just a few weeks ahead of tough negotiations at home and with EU peers on a 2015 budget widely expected to break promises to Brussels over deficit cuts.

Sources close to Hollande said the new cabinet would carry out his plan of reconciling pro-business measures to boost growth, including €40bn in corporate tax cuts — with promises to adhere to EU budget rules.

“We need it to act in such a way as to ensure solidarity, respect, and consistency,” a source said of Hollande’s bid to draw a line under two years of confused leadership.

Hollande’s former coalition partners, the left-wing Greens, will field no ministers in the new cabinet.

Finance minister Michel Sapin kept the role in which he has tried to reassure EU partners that France will finally mend its finances despite repeatedly failing to bring its deficit below an EU-endorsed limit of 3% of output.

Sapin was undermined by Montebourg’s public questioning of the EU rules.

“After the unacceptable comments from the ejected economy minister, this step was overdue,” Germany’s EU commissioner Guenther Oettinger said earlier of the reshuffle.

“This move clearly shows that the right wing of the Socialist party is also able to speak louder,” wrote ING’s Julien Manceaux in a note to clients, calling the choice of Macron “a very good signal to France’s European partners”.

Two other rebels, the culture minister, Aurelie Filippetti, and the education minister, Benoit Hamon, were replaced by existing ministers solidly loyal to the increasingly centrist line that Hollande has set for his Socialist government since January.

More in this section

Select your favourite newsletters and get the best of Irish Examiner delivered to your inbox