French Government Dissolved Over Dissatisfaction with 'German Austerity'

French Government Dissolved Over Dissatisfaction with 'German Austerity'

The French cabinet was dissolved this weekend thanks to increasing signs of rebellion from ministers on the left who are angry over “German austerity”. 

French President François Hollande has ordered his Prime Minister Manuel Valls to convene a new cabinet. The new line up is expected to be announced this week.  

The crisis was provoked initially by the socialist Economy Minister Arnaud Montebourg, who has been an outspoken critic of the current direction that France’s government is taking on economic matters. Speaking in an interview on Saturday with French newspaper Le Monde, he said “France is the eurozone’s second-biggest economy, the world’s fifth-greatest power, and it does not intend to align itself, ladies and gentlemen, with the excessive obsessions of Germany’s conservatives,” adding “You have to raise your voice. Germany is trapped in an austerity policy it imposed across Europe.”  

He warmed to his theme in a speech delivered at a Socialist party rally on Sunday, saying “France is a free country which shouldn’t be aligning itself with the obsessions of the German right”. And in thinly veiled criticism of President Hollande, he called conformism “an enemy”, adding “my enemy is governing”.

His outbursts were immediately panned, drawing calls for the minister to step down. Some of his socialist colleagues admitted that it was illogical for the economy minister to be attacking his own government’s economic policy.

Montebourg was joined in his criticism by education secretary Benoit Hamon, who yesterday called for an end to Europe’s economic direction being dictated by German Chancellor Angela Merkel.

Culture minister Aurelie Filipetti’s job is also believed to be at risk due to a Tweet to the two rebel minister in which she wished them a “good day”. This has been understood to signify tacit approval for their sentiments.

The row has made public a rift that had been simmering within the left-wing government. Monteburg is positioned to the far left of the Socialist party, and has repeatedly voiced his belief that France needs more redistributive policies to boost the economy. Indeed, this was the position of Hollande himself when he ran for President two years ago. At the time he promised to cancel tax cuts for wealthy individuals and the tax exemptions for business brought in by the previous President Nicolas Sarkozy; raise the top rate of tax to 75 percent for those earning over €1million; reduce the retirement age to 60 with a full pension for those who had worked for 42 years; and reinstate 60,000 jobs in public education that had been cut by Sarkozy.

However, thanks to pressure from Germany, the official policy is now to cut taxes for businesses in an attempt to boost growth, and cut government spending to reduce the deficit.

France’s economy is stagnant; the central bank has already told Hollande that there is no hope of reaching his 1% goal for growth and instead predicted just a 0.5 percent increase this year. Unemployment is at 11 percent. Both Hollande and his Prime Minister are unpopular figures, with approval ratings lying at 17 percent and 36 percent respectively, making Hollande the least popular French President in more than 50 years.   

This is the second cabinet reshuffle in France in less than six months. The current government was formed just four months ago following poor results for the Socialist party in the municipal elections, in a reshuffle that included the promotion of Valls to Prime Minister, replacing Jean-Marc Ayrault. Valls was brought in to take a firmer line with the cabinet, as Ayrault was accused of being too soft. Le Parisien is reporting that, as a result, Valls gave Holland an ultimatum over Montebourg saying “It’s him or me. If you refuse, I will go”.

The challenge before Valls now is to convene a cabinet that can gain the approval of the national assembly, despite the revolt on the left. Speaking to Libération, constitutional expert Dominique Rousseau commented “We can’t rule out the government being thrown out by a majority in parliament, and the president would have to envisage a dissolution of the assembly. The crisis is not over, it’s just beginning.”