French president Francois Hollande is dissolving the government after an open feud in Cabinet over the country’s economy.
Prime Minister Manuel Valls offered up his Socialist government’s resignation today after accusing his economy minister of crossing a line with open criticism of the government’s policies.
Mr Hollande accepted the resignation and ordered Mr Valls to form a new government by tomorrow.
France has had effectively no economic growth this year and Mr Hollande’s approval ratings are in the teens.
The country is under pressure from the European Union to get its finances in order, but Economy Minister Arnaud Montebourg has questioned whether the austerity pressed by the EU will kick-start French growth.
He said “a major change in our economy policy” was needed from the president and prime minister.
That drew the anger of the Socialist leadership, which said his job was to support the government, not criticise it from within.
“He’s not there to start a debate but to put France back on the path of growth,” Socialist Party spokesman Carlos Da Silva told Le Figaro newspaper.
Mr Hollande's promises to cut taxes and make it easier for businesses to open and operate have stalled, in large part because of the divisions among Socialists.
Mr Montebourg’s criticism of austerity – and his pointed remarks about German chancellor Angela Merkel – have rankled before.
In an interview last week, after Germany’s economy also showed signs of stagnation, he said France’s neighbour had been “trapped by the policy of austerity”.
He went on to say: “When I say Germany, I mean the German right wing that supports Angela Merkel. It’s not France’s job to align itself to the ideological axioms of Germany’s right wing.”
Mr Montebourg represents the hard-left Socialist base, and his departure from the government is likely to anger many of the voters who brought Mr Hollande to office in 2012.
Since that time, France’s economy has only worsened and the sense of impending crisis weighs heavily.
French officials have already made clear that the deficit will again surpass the 3% target set by the European Union and are negotiating a delay.
Mrs Merkel declined to comment directly on the change in France’s government but said she wishes “the French president success with his reform agenda”.