France’s Prime Minister Manuel Valls has submitted the government’s resignation to President Francois Hollande and has been asked to form a new cabinet.
The French government was badly shaken on Sunday by criticism over its handling of the economy by economy minister Arnaud Montebourg.
Moments after Manuel Valls’s resignation President Francois Hollande issued a statement.
Francois Hollande asked Manuel Valls to set up a new cabinet “consistent with the direction [Francois Hollande] has set for the country”.
The prime minister had accused Arnaud Montebourg of “crossing a yellow line” after the economy minister had attacked austerity measures which he said were strangling France’s growth.
France’s Prime Minister Manuel Valls has submitted the government’s resignation to President Francois Hollande and has been asked to form a new cabinet
Arnaud Montebourg told a meeting of Socialists in eastern France that the time had come to put up a “just and sane resistance” to the “excessive obsessions of Germany’s conservatives”.
On Saturday, Arnaud Montebourg told Le Monde newspaper that Germany was trapped in an austerity policy that it imposed across Europe”.
He was backed up by education minister Benoit Hamon and appeared to have the support of culture minister Aurelie Filippetti, too.
Benoit Hamon called on Sunday for a revival in demand and for an end to German Chancellor Angela Merkel setting Europe’s direction: “You can’t sell anything to the French if they don’t have enough income.”
Manuel Valls became prime minister in March after a poor performance by President Francois Hollande’s Socialist party in local elections.
Earlier this month, the French government admitted it would be impossible to reach a previous growth forecast of 1%. Germany saw its economy shrink by 0.2% between April and June.
Arnaud Montebourg told French radio shortly before Manuel Valls announced the government’s resignation that he had no regrets about his remarks, “first of all because there’s no anger”.
There was no debate about authority, Arnaud Montebourg told Europe 1 radio, but a “debate about economic direction”.
Arcelor Mittal is no longer welcome in France, Minister for Industrial Recovery Arnaud Montebourg has said, accusing the steelmaker of “lying” and “disrespecting” the country.
The multinational angered workers and the government when it announced a plan in October to close two furnaces at its steel plant in Florange.
It gave the government a grace period of 60 days to look for a new owner.
The Mittal family said they were “extremely shocked” by the comments.
“We no longer want Arcelor Mittal in France because they didn’t respect France,” Arnaud Montebourg told French business daily Les Echos.
The minister, who previously opposed the closure of a Peugeot factory, accused the company of “overwhelming lies” and said the Florange closure breaks a promise made by chief executive Lakshmi Mittal during Mittal Steel’s 26.9 billion-euro takeover of Arcelor in 2006, which was strongly opposed by French ministers.
The problem “isn’t the furnaces in Florange, it’s Mittal”, said Arnaud Montebourg.
Arcelor Mittal is no longer welcome in France, Minister for Industrial Recovery Arnaud Montebourg has said
Lakshmi Mittal, the Indian-born chief executive, is expected to meet with President Francois Hollande on Tuesday to discuss the group’s operations in France.
The talks come ahead of a deadline on Saturday which Lakshmi Mittal gave the state to find a buyer for the two idled blast furnaces in Florange, a traditional steel town in north-eastern France.
The government says it has received two offers, but only for the entire site. Lakshmi Mittal has refused to sell the full operation, which employs a total of 20,000 workers.
As a result, Arnaud Montebourg has said he is exploring how to seize the entire Florange site should Lakshami Mittal refuse his demands.
According to the French newspaper, Arnaud Montebourg’s idea “would be a partnership with a minor manufacturer, the time to stabilize activity” in Florange.
Jean-Louis Borloo, a conservative politician and a former environment minister, also supported Arnaud Montebourg’s efforts.
“France’s steel industry needs to live – there are 2,200 people on the site, 22,000 Arcelor Mittal employees in France and globally, there are 75,000 [employees involved in steel],” he told France Inter radio.
“And the idea that the government, along with its sovereign wealth fund and partners like Eramet and Ascometal (mining and metallurgical groups), reflect upon a temporary state control… does not seem inappropriate.”
The Mittal family said they were “extremely shocked” by Arnaud Montebourg’s attacks on the steelmaker.
One person close to the group said: “These are pretty violent comments towards a group that employs 20,000 people in France.”