France’s new Prime Minister Manuel Valls, centre, will have to tackle unemployment and a public deficit that remain stubbornly high after two years of Socialist rule. Image Credit: AFP

Paris: France’s new Prime Minister Manuel Valls faced a delicate balancing act Tuesday as he set about forming a new government tasked with reviving the economy and reining in public finances.

President Francois Hollande nominated the tough-talking interior minister to the post on Monday after the ruling Socialists suffered a drubbing at municipal polls, replacing incumbent Jean-Marc Ayrault who had headed up a deeply unpopular government.

Valls’s firm stance on crime and his dynamism have won him respect from voters across the political spectrum, but the nomination of the 51-year-old - considered on the right of the Socialist Party - has antagonised some ministers who have preemptively refused to take part in his new government.

Valls is arriving at a time of “very complicated economic conditions”, said Frederic Dabi of the IFOP polling institute.

Valls faces the challenge of “an economic context that has deteriorated sharply”, he added, with unemployment and a public deficit that remain stubbornly high after nearly two years of Socialist rule.

Growth, meanwhile, is almost non-existent and the exasperation of the French was reflected in Sunday’s municipal polls that saw the Socialists lose a mammoth 155 towns and cities to the main opposition and far right.

In a televised address on Monday, Hollande charged Valls with implementing a package of pro-business policies known as the Responsibility Pact, which cuts taxes on firms that are widely viewed as hampering employment and growth, and imposes spending cuts of €50 billion (Dh253 million or $69 billion).

At the same time, he also asked him to put in motion a new “Solidarity Pact” that would include steps to boost spending on education and health and reduce personal income taxes.

Aside from the realities of a dire economic situation, Valls also has the challenge of ironing out divisions within the French left, particularly those who feel that the Socialists have adopted a pro-business stance.

Already ministers Cecile Duflot and Pascal Canfin have announced they will not be part of Valls’s government, and the EELV green party they belong to says it has not yet decided whether to remain in the governing coalition.

“Since he has been a government member, Manuel Valls has never expressed his views on the economy, on ecology, on social issues,” Francois de Rugy, an EELV lawmaker, told Europe 1 radio.

Valls, who is officially due to take over from Ayrault in a ceremony at 1300 GMT, met with an EELV delegation early Tuesday, Green Senator Jean-Vincent Place told AFP.

There is also strong speculation that the mother of Hollande’s four children, Segolene Royal, will be recalled from the political wilderness as part of the new government, expected to be announced before a cabinet meeting planned for Wednesday or Thursday.

Dabi said the divisions should iron themselves out once a new government is formed, adding that Valls was likely to have more of a handle on his ministers than his predecessor.

“Jean-Marc Ayrault’s personal image is not too damaged,” Dabi said. “He appears pleasant, competent, serious, close to the people, but he had a leadership deficit on his ministers, there was the feeling that he didn’t really manage his government.”

He pointed to the widespread feeling among the French that the government flip-flopped on issues and did not lead the country with a firm hand at a challenging time.

“Through his personality, his dynamism... Manuel Valls could bring more leadership over his ministers,” Dabi said.