Can a Fish Out of the Water Please Everyone at the Same Time?

After annoying the socialists with the appointment of right-winger Manuel Valls as his new prime minister, French president Francois Hollande went the other way by expanding the role of extreme left-winger and state interventionist Arnaud Montebourg.

Please consider Hollande boosts left in cabinet reshuffle.

President François Hollande has promoted prominent leftists in his revamped Socialist government days after appointing rightwinger Manuel Valls as his new prime minister.

In a move clearly aimed at appeasing unease in Socialist ranks about Mr Valls, Mr Hollande balanced the choice of his close friend Michel Sapin as finance minister with an enhanced role for controversial leftwinger Arnaud Montebourg.

Mr Sapin, a moderate who was briefly finance minister in the early 1990s, takes over from Pierre Moscovici with the task of steering France’s wayward public finances under the close scrutiny of Brussels, Berlin and the country’s other eurozone partners.

But the traditional role of the finance minister as overlord of the economy has been broken up, with Mr Montebourg, a strong state interventionist and fierce critic of Berlin-backed austerity policies, given charge of the wider economy, industry and digital development.

Mr Montebourg’s promotion underscores Mr Hollande’s concern to keep the leftwing of the Socialist party on board following the appointment of Mr Valls in the wake of a heavy defeat for the government in local elections last month. But it threatens to sow confusion over Mr Hollande’s recent commitment to pro-business policies.

Mr Sapin, labour minister for the past two years, will have the tough task of persuading Brussels to give Paris more time to achieve its budget deficit targets as Mr Hollande shifts the emphasis of policy to growth and jobs generation following the election defeat.

Jeroen Dijsselbloem, who heads the eurogroup of eurozone finance ministers, underscored the pressure on Paris by saying on Wednesday that “time was running out” for France to meet its budget deficit targets.

Hollande acts like a fish out of water, first flopping this way, then that, with no apparent strategy other than a desperate search for water.

Don't expect this strategy to please anyone, especially Brussels and Germany.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com