Confidence vote won, absolute majority lost: not the best start for the new French government

The new French government, led by Prime Minister Manuel Valls, yesterday won its first vote of confidence in the National Assembly. That was expected, but the big news is that Valls and his government have fallen well short of winning an absolute majority.

269 MPs voted in favour, 244 against, and 53 abstained. The absolute majority is set at 289 votes.

Most importantly, the voting records reveal that 31 MPs from the Prime Minister's Socialist Party chose to abstain. Back in April, when Valls sought the confidence for his first government, he got 306 votes in favour. Hence, yesterday marked a substantial step backwards.

The outcome of the confidence vote seems to confirm that the 'left wing' of the French Socialist Party remains opposed to the economic policies being pursued by Valls - which in substance means remaining critical of the approach defended by the European Commission, Germany and other northern eurozone countries.

Incidentally, these divergences forced a cabinet reshuffle at the end of August - which saw the ousting of the three most left-leaning ministers, notably including Economy Minister Arnaud Montebourg.

French history shows that it is possible to govern without an absolute majority in parliament. Another Socialist Prime Minister, Michel Rocard (widely seen as one of the political mentors of Valls), did it between 1988 and 1991.

However, it remains to be seen to what extent Valls will be able to push through the wide-reaching reforms and sizeable spending cuts demanded by the EU if he fails to win back the full support of his own party. As an alternative, he may try and strike deals with the smaller centrist parties in parliament - but the success of such a move would be far from guaranteed.

Indeed, this is hardly great news at a time when the French economic situation is not encouraging, making it essential to move forward quickly with the necessary measures.
 
The road to recovery may have just become longer and bumpier for France.

Meet the new French cabinet

The new French cabinet has just been unveiled (the picture comes from Le Figaro's website). A few ministers have been re-shuffled around, but actually there are only two new entries compared to the previous team: Ségolène Royal as Environment and Energy Minister, and François Rebsamen as Employment Minister.

The most interesting change took place in the Economy and Finance Ministry. Pierre Moscovici has not held onto this post (which means we may see him in Brussels soon as France's next European Commissioner), and his portfolio has been split into two: Michel Sapin is the new Finance and Public Accounts Minister, while Arnaud Montebourg is the new Economy and Industry Minister.

From the names of the two ministries, we assume Sapin will be the one leading in negotiations over deficit targets with the European Commission in future. Similar to his predecessor Moscovici, Monsieur Sapin seems to think France needs to take the medicine and continue with deficit reduction. He said in a radio interview last year,

There's a state, but it's totally bankrupt. This is the reason why we had to put in place deficit reduction programmes, and no siren must divert us from this objective.

It will be interesting to see how he will interact with Arnaud Montebourg, who recently described the people in charge of competition and state aid policy at the European Commission as "talibans of the law" and "fundamentalists who apply the [legislative] texts blindly to the detriment of European interests." Montebourg is also one of the most vocal supporters of a devaluation of the euro to help French exports.

We don't know the rationale behind the decision to split the Economy and Finance Minister yet. One idea could be achieving some sort of good cop (Sapin) / bad cop (Montebourg) dynamic when negotiating with Brussels. That said, after adding the views of the new Prime Minister Manuel Valls and President François Hollande into the mix, it could become tricky to figure out who is in control and which direction the French government actually wants to head on economic policy.

With regards to other ministers, Laurent Fabius, Jean-Yves Le Drian and Christiane Taubira have all kept their jobs as Foreign, Defence and Justice Ministers respectively. Budget Minister Bernard Cazeneuve is the new Interior Minister. The budget portfolio has been moved to the Public Accounts part of Sapin's post.

The next step for Manuel Valls and his cabinet is a vote of confidence in the lower house of the French Parliament, the National Assembly, which should take place on Tuesday.

Follow us on Twitter @OpenEurope for more updates.

Le (premier) flic, c'est chic: Hollande picks Manuel Valls as new Prime Minister

As expected, François Hollande yesterday named Interior Minister Manuel Valls, France's 'top cop' (premier flic, hence the title of this blog), as new Prime Minister. The composition of the new cabinet is expected to be announced tomorrow.

For the moment, we know that the two ministers from the Green Party, Cécile Duflot and Pascal Canfin, are not interested in taking part in the new government. They explained in a communiqué that "the ideas supported by the new Prime Minister [Valls] for several years...do not constitute an appropriate response to the problems of the French". We also know that Finance Minister Pierre Moscovici is not in Athens for today's Eurogroup meeting - probably a sign that he is not going to be confirmed either.

It is fair to describe Manuel Valls as an 'atypical' French Socialist - and not just because of his firmness in dealing with certain crime and migration-related issues. The Barcelona-born new Prime Minister has upset quite a few fellow party members in the past. For example, Valls has come out in favour of scrapping France's 35-hour working week and raising retirement age to 65. 

He voted 'No' in an internal Socialist Party referendum on the European Constitution in December 2004 - but then aligned himself with the rest of the party and campaigned for a 'Yes' vote. He even suggested that the name 'Socialist Party' was "dated" and had to be changed. Perhaps not surprisingly, Valls only won 5.6% of votes when Socialist Party members picked their Presidential candidate in October 2011.

In other words, the choice of Manuel Valls as new Prime Minister could be seen as a sign of Hollande's renewed willingness to go ahead with at least some of the supply-side reforms recommended by the European Commission to put the French economy back on track. However, the road ahead for the new French cabinet looks far from easy, for at least two reasons:

• The reaction of the aile gauche (left wing) of the Socialist Party to the appointment of Manuel Valls has been cautious, to say the least. Rebellions in parliament on future economic reforms cannot be ruled out.
• The Socialist Party's majority in the Assemblée Nationale (the lower house of the French parliament) has been shrinking following a number of by-elections, and will be down to only one seat - 290 of a total 577 - once outgoing minister Cécile Duflot of the Green Party claims her seat back. This risks making it more complicated for the new government to pass meaningful economic reforms - although Valls could try and muster case-by-case alliances with some of the smaller centrist parties.   

The first test for Valls and his cabinet will be to push through the so-called 'responsibility pact' - a plan to cut taxes on businesses in return for more hiring announced by Hollande in his New Year's address, and the details of which are due to be unveiled later this month.

We will be monitoring the situation in France closely. For now, one last interesting fact for football geeks (of which there are a few in the Open Europe office): Catalan composer Manuel Valls i Gorina, a cousin of the new French Prime Minister's father, is the author of the official anthem of FC Barcelona. And no, this is not an April's Fool day hoax.

Hollande expected to announce cabinet reshuffle after local election 'punishment'

If you want to get a sense of how badly the latest French local elections went for President François Hollande, have a look at today's front page of left-leaning French daily Libération:

 

The headline means 'The punishment', and it summarises the outcome of the local vote pretty well. According to data from the French Interior Ministry, the centre-right (that is, the opposition UMP and its allies) gained 139 towns with more than 10,000 inhabitants compared to the 2008 local elections. The centre-left (Hollande's Socialist Party and its allies) lost 160. The fact that the Socialist Party managed to retain Paris - where Anne Hidalgo was elected as the city's first female mayor - cannot compensate for what was an unequivocal defeat nationwide.

Marine Le Pen's anti-EU Front National took control of eleven towns - in addition to Hénin-Beaumont, where the party won an outright victory in the first round. Though not impressive in absolute terms (see this blog post from last week for some more background information), the score is nonetheless politically significant. It shows how French voters increasingly see Front National not just as a mere 'protest party', but as a credible alternative for power - albeit so far only at the local level and in a very limited number of towns.

Meanwhile, the immediate consequence of yesterday's local election fiasco is that Hollande is expected to announce a cabinet reshuffle any moment. The French President has just come out of a two-hour meeting with Prime Minister Jean-Marc Ayrault, whose departure looks very likely, judging by the headlines in the French press over the past few days.

Interior Minister Manuel Valls, who enjoys a pretty high approval rating compared to his fellow cabinet members (in part thanks to his tough stance on certain crime and migration issues), is broadly seen as the favourite to replace Ayrault as Prime Minister. Laurent Fabius, currently serving as Foreign Minister, is another name being mentioned by the French media. 

However, in light of the latest macroeconomic indicators, the impression remains that moving a few ministers around will not be enough to restore the French government's credibility vis-à-vis the electorate - unless the policies also change and France makes some real progress in pushing ahead with the reforms needed to restore its competitiveness within the eurozone.