PARIS - French President Francois Hollande asked his prime minister on Monday to form a new government, looking to impose his will on the cabinet after rebel leftist ministers had called for an economic policy U-turn.
The surprise move came the day after outspoken Economy Minister Arnaud Montebourg had condemned what he called fiscal"austerity" and attacked euro zone powerhouse Germany's"obsession" with budgetary rigour.
In a terse statement, Hollande's office said Prime Minister Manuel Valls had handed in his government's resignation, opening the way for a reshuffle just four months after it took office. "The head of state asked him to form a team that supports the objectives he has set out for the country," the statement said, suggesting Valls would continue trying to revive the euro zone's second largest economy with tax cuts for businesses while slowly reining in its public deficit by trimming spending.
France has lagged other euro zone economies in emerging from a recent slowdown, fuelling frustration over Hollande's leadership, both within his Socialist party and further afield.
The new cabinet will be announced on Tuesday and there was no immediate word on who would stay and who would go.
If Hollande decided to sack Montebourg, who is viewed as a potential presidential rival, he would risk seeing the ousted minister take with him a band of rebel lawmakers and deprive him of the parliamentary majority he needs to push through reforms.
Opposition conservatives, who for weeks have been embroiled in their own leadership rows, called for an outright dissolution of parliament, as did the far-right National Front. "With half of the presidential mandate already gone, it doesn't bode well for the ability of the president, or whatever government he chooses, to take key decisions," said former Prime Minister Francois Fillon, one of handful of hopefuls for the conservative ticket in the 2017 presidential election.
A new survey released at the weekend showed Hollande's poll ratings stuck at 17 per cent, the lowest for any leader of France since its Fifth Republic was formed in 1958. Valls, a once-popular interior minister, saw his own popularity eroded by his failure to tackle unemployment, which is stuck above 10 per cent.
Despite being promoted within the cabinet to economy minister, Montebourg has emerged as the most visible leader of the left since Hollande in January adopted a more pro-business line to try and boost the economy with corporate tax breaks.