French government resigns, President orders new Cabinet to be formed

A file picture taken on Aug 20, 2014, shows French President Francois Hollande (left) and French Prime Minister Manuel Valls shaking hands at the Elysee presidential palace in Paris after a weekly cabinet meeting. -- PHOTO: AFP
A file picture taken on Aug 20, 2014, shows French President Francois Hollande (left) and French Prime Minister Manuel Valls shaking hands at the Elysee presidential palace in Paris after a weekly cabinet meeting. -- PHOTO: AFP

PARIS (Reuters/AFP) - France's Prime Minister Manuel Valls presented the resignation of his government to President Francois Hollande on Monday, Mr Hollande's office said in a statement, throwing France into fresh chaos.

Mr Hollande ordered Mr Valls to form a new Cabinet on Tuesday, "consistent with the direction he (Mr Hollande) has set for the country", the presidency said in a statement.

It did not give any reasons.

The move comes a day after leftist Economy Minister Arnaud Montebourg called for new economic policies and questioned what he called Germany's "obsession" with budgetary rigour. Mr Montebourg spent his weekend bad-mouthing the country's economic direction and ally Germany in a much-criticised show of insubordination that had angered Mr Valls.

Finance Minister Michel Sapin acknowledged this month that weak growth would mean France missing its deficit-reduction target for this year but stressed the government would continue cutting the deficit “at an appropriate pace”.

The weakness of the economy was a major factor in Mr Valls seeing his approval rating drop to a new low of 36 per cent this month, while Mr Hollande remained the most unpopular president in more than half a century, an Ifop poll showed on Sunday.

Mr Valls was asked by President Francois Hollande to form a new team only four months ago but has continually had to reconcile policy differences between leftists such as Montebourg and more centrist members of his Socialist-led government.

The Cabinet reshuffle in March came after the ruling Socialists suffered a bruising defeat in local elections.