French government dissolves over economic policy

< President Francois Hollande is weighing his options after dissolving the government on Monday over open feuding in the Cabinet about how much cutting — or spending — will revive the country’s stagnant economy.

Hollande is to announce a new government on Tuesday. The debate among French Socialists mirrors one taking place across Europe on whether to pursue a German-led model of fiscal austerity or use more government spending to spur growth. >

France has had effectively no economic growth this year, unemployment is hovering around 10 percent and Hollande’s approval ratings are sunk in the teens. The country is under pressure from the 28-nation EU to get its finances in order, but Economy Minister Arnaud Montebourg has criticized austerity as the wrong medicine to foster growth and argues the government should spend more freely to create jobs.

Above is from this article.

Mr Hollande has never really had the left-wing of his party, which has been pushing an anti-German, anti-austerity line since the election, under control. Yesterday, the tension erupted into outright revolt.

How will he react? Mr Hollande is, by nature, a mediator. Mr Montebourg and Benoît Hamon, the education minister and another dissenting voice in the past few days, were originally promoted following the disastrous local elections in March as a sop to his party. That appears to have backfired and could ultimately split the Socialist party.

It remains to be seen how bad the political damage is and whether it will lead to a general election. If that were to happen, it would surely be beyond Mr Hollande’s ability to form a grand coalition with the right-of-centre UMP party to fight off the ultra-Socialists like Mr Montebourg on one flank and Marine Le Pen’s National Front on the other.

Above is from another article about this:

Sounds like Hollande is sinking…I could not believe he won against Sarkozy in the last general election. This could get interesting.

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