New French PM forms government

 02 Apr 2014 - 7:59

Former French Prime Minister Jean-Marc Ayrault (right) welcomes the new Prime Minister Manuel Valls (left) , at Matignon in Paris, France, yesterday. The change of office comes after the defeat of the left wing Parti Socialiste (Socialist Party) in the municipal elections. 

PARIS: France’s new Prime Minister Manuel Valls set about forming a new government yesterday tasked with the mammoth challenge of reviving a battered economy, as the EU warned Paris not to renege on its reform pledges.
President Francois Hollande nominated the tough-talking interior minister to the post on Monday after the ruling Socialists suffered a drubbing at municipal polls, replacing Jean-Marc Ayrault who had headed up a deeply unpopular government.
“This is a trying, demanding, round-the-clock task but at the same time it is exhilarating,” a visibly emotional Ayrault said as he made way for Valls in a handover ceremony at the prime minister’s official residence, his former employees looking on, some with tears in their eyes.
Valls’s firm stance on crime and his dynamism have made him popular with voters across the political spectrum but his style and politics, compared to those of former British premier Tony Blair, have alienated more left-leaning members of the Socialist Party.
Some ministers have even preemptively refused to take part in his new government, expected to be announced before a cabinet meeting planned for today or tomorrow.
Valls faces the challenge of “an economic context that has deteriorated sharply”, said Frederic Dabi of the Ifop polling institute, with unemployment and a public deficit that remain stubbornly high after 22 months of Socialist rule. Growth, meanwhile, is almost non-existent and the exasperation of the French was reflected in Sunday’s municipal polls that saw the Socialists lose a whopping 155 towns and cities to the main opposition and far right.
In a televised address on Monday, Hollande tasked Valls with implementing a package of pro-business policies known as the Responsibility Pact, which cuts taxes on firms that are widely viewed as hampering employment and growth, and imposes spending cuts of ¤50bn ($69bn).
He also asked him to set in motion a new “Solidarity Pact” that would include steps to boost spending on education and health and reduce personal income taxes.
Economists say the critical question is whether the new government will continue to respect commitments to the European Union to reduce its public deficit from 4.3 percent to 3.0 percent of output, or put these targets aside and risk angering Brussels. AFP