- Arnaud Montebourg, ex Minister of Economy
Amid rapidly falling popularity of Francois Hollande in France, French President ordered his Prime Minister Manuel Valls to form a new government as a response to the recent comments of outgoing Economy Minister Arnaud Montebourg, who criticized France's economic direction as well as Germany's economic policies of austerity measures, which dragged France and Europe into the worst economic crisis since the 1929 Depression. Unemployment rate in France remains stubbornly high, the economy is faltering, failing to reach the government's estimated 1% growth this year. On top of that Hollande needs Brussels to relax its budget deficit targets for France for a third time. This is the second cabinet reshuffle in less than six months under Hollande's leadership. Meanwhile, Hollade's approval rating has been swiftly plunging, hitting 17%, the lowest presidential rating ever in the Fifth Republic.
Hollande and Valls outlined their solution to the economic crisis in the Responsibility Pact, providing businesses with tax breaks of some 40 billion euros in exchange for the creation of 500,000 jobs over three years. Hollande has planned to finance the Pact with 50 billion euros in spending cuts. It is exactly the plan, which has angered the left wing of the party. Montebourg argued that part of the money should be used for household tax cuts to lift domestic demand.
© Dukascopy Bank SA