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Hollande Names Manuel Valls Prime Minister After Election Defeat

March 31, 2014

Hollande Names Manuel Valls Prime Minister After Election Defeat

French Interior Minister Manuel Valls leaves the Elysee Palace after the weekly cabinet meeting on Oct. 23, 2013 in Paris. Photographer: Chesnot/Getty Images

French President Francois Hollande, whose Socialist Party was handed an unprecedented defeat in the municipal elections, named Manuel Valls his new prime minister to address voter dissatisfaction with his government.

“In voting or in abstaining, you expressed your unhappiness and discontent, and I’ve heard you,” Hollande said in an eight-minute address to the nation last night. “Not enough change, too much unemployment, not enough social justice, too many taxes, not enough efficiency.”

Valls, 51, who was France’s interior minister, replaces Jean-Marc Ayrault, who had led the government since Hollande’s May 2012 election. Valls, a Spanish-born former mayor of a town on the outskirts of Paris, whose tough stance on crime made him among the more popular French ministers, will be taking over at a time when France is struggling with record-high joblessness and an economy that has barely grown in the past two years.

“Although he has limited government experience Manuel Valls is the right man, with natural authority, to lead a government through the tough period of faster implementation of structural reforms and spending cuts,” Dominique Barbet, an economist at BNP Paribas SA, said in an e-mailed note yesterday.

In the local-council elections across France’s villages, towns and cities on March 23 and 30, the president’s Socialist Party lost control of a record 151 towns with populations of more than 10,000. Hollande, the least-popular president since at least 1958, has been pressured to show he can move quickly to address the concerns of the French after jobless claims climbed to a record of more than 3 million.

Valls Favored

“Jean-Marc Ayrault may not be the only one responsible but the time has come for shock treatment,” Socialist lawmaker Julien Dray said on Europe 1 radio yesterday. “The time has come to give the government a new profile.”

Hollande’s government has struggled to rekindle France’s sluggish economy. In January, he unveiled a “Responsibility Pact,” with cuts of 30 billion euros ($40 billion) from business charges and promised to squeeze government spending to cap unemployment that’s at a 16-year high.

Hollande yesterday reiterated his plan to cut payroll taxes.

Ayrault said on March 30, after the election defeats, that the government “has not explained well enough its actions to get the country back on its feet.” He said he’s “convinced that these difficult reforms will bear fruit.”

Polls have routinely shown Valls as the favorite to replace Ayrault as prime minister. A BVA poll March 9 said 31 percent favored Valls as prime minister, ahead of Lille Mayor Martine Aubry at 18 percent and Foreign Minister Laurent Fabius at 17 percent.

Valls’s Stand

Even so, Valls’s popularity has declined in recent months. In January, his approval rating fell 8 points to 53 percent in an Ipsos poll for Le Point, after he single-handedly banned a traveling show by comic Dieudonne, whom he accused of anti-Semitism. That still left him as the most-popular politician in the country.

For Hollande, whose popularity rating is less than half that of Valls, risks being outshone by his prime minister, who ran in the Socialist Primary in 2011, showing his presidential ambitions. He was defeated in the first round.

In his primaries campaign, Valls expressed market-friendly views including the creation of a Small Business Act to support national business. He called for an end of the 35-hour work week and for the government to raise the minimum retirement age.

In 2010, when he was a lawmaker, Valls said the European Commission should have control over national budgets.

“If we want political, economic and monetary governance, we must give the European Central Bank a new role, so that it can act like the U.S. Federal Reserve,” he told Radio J.

Budget Discipline

During his campaign, Valls pledged to bring France’s budget deficit below 3 percent of gross domestic product and to add that target to the constitution.

Valls joined the Socialist Party in 1980 and worked under several administrations, including with Prime Minister Lionel Jospin from 1997 to 2002. He was the mayor of the Paris suburb of Evry from 2001 to 2012.

The son of a Spanish painter, Valls was born in Barcelona and moved to France before he obtained his French citizenship at the age of 20. A separated father of four, Valls’s partner is a violin player.

To contact the reporters on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net; Gregory Viscusi in Paris at gviscusi@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Vidya Root, Steve Rhinds


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