Hollande's ex-partner Royal joins streamlined French government

Paris (AFP) - French President Francois Hollande recalled his former partner Segolene Royal from the political wilderness on Wednesday to join a new, streamlined government, days after his Socialist Party suffered an election drubbing.

Sunday's stinging setback in nationwide municipal elections prompted Hollande to sack premier Jean-Marc Ayrault and replace him with tough-talking former interior minister Manuel Valls, 51.

The two wasted no time in reshaping the government, appointing two new faces in a cabinet of just 16 ministers -- less than half the 38 in the previous line-up -- faced with the mammoth challenges of bringing down unemployment and boosting almost non-existent growth whilst operating in tough budget constraints.

Royal, Hollande's ex-partner and mother of his four children, was named environment and energy minister in a spectacular return to the corridors of power for the woman who lost the 2007 presidential election to Nicolas Sarkozy.

She will rank second, behind Foreign Minister Laurent Fabius, in a ministerial line-up of eight men and eight women.

"I am very honoured," she told France 3 television, pledging to work for economic recovery and jobs and make France "an environmental power".

The 60-year-old had in the past been one of the Socialists' biggest hitters, but was reportedly blocked from Hollande's first cabinet because of hostility from Valerie Trierweiler, the president's then girlfriend and de facto first lady.

That obstacle has now been removed following Hollande's split from Trierweiler in January in the aftermath of the revelation of his affair with actress Julie Gayet.

- 'Restore hope' before elections -

Valls faces the tall challenge of turning around the unpopular government's fortunes in time for Hollande to stand a chance of winning a second five-year term in 2017.

The new premier had his eyes on that date as he got down to business Wednesday, telling TV station TF1 his ambition for France was "that by the end of Francois Hollande's term, the people of France will live better, that they will again have hope".

"There's division, pessimism and gloom in our country," he said. "The country is facing a lot of difficulties. They are undeniable, and we are here to overcome them. But we also have a lot of assets. It's time to restore hope, and that is my task."

With the country battling the economic doldrums, there was also major change at the finance ministry, in charge of sorting out stubbornly high unemployment and budget deficits after 22 months of Socialist rule.

Pierre Moscovici, who as finance and economy minister was unable to pull France out of its rut, was replaced by two contrasting politicians.

Former labour minister Michel Sapin, a supporter of budgetary rigour, was appointed to the powerful post of finance minister.

Left-wing firebrand Arnaud Montebourg, a prominent critic of globalisation seen by some as anti-business, was named economy minister, a promotion from his former brief of industrial renewal.

Opposition leader Jean-Francois Cope slammed these nominations, pointing out that Sapin failed to bring down the country's jobless numbers, which in February reached a record 3.34 million people.

Montebourg has made headlines with his outspoken criticism of EU-backed austerity measures supported by Sapin, and of neighbour and ally Germany, which he has blamed for factory closures in France.

In 2011, before the Socialists came to power, he accused German Chancellor Angela Merkel of "Bismarck-style" policies, a reference to Germany's first chancellor, Otto von Bismarck, who humiliated France in the 1870-71 Franco-Prussian war.

"He is going to discuss our economic policy in Europe, particularly with the Germans, whom he has copiously insulted for two years," Cope said.

Montebourg also grabbed headlines when he labelled the head of tyre giant Titan an "extremist" after the CEO criticised the French workforce as lazy, and he got into a very public fight with steelmaker ArcelorMittal over the closure of a plant.

- Alienation on left -

Valls is very clearly on the right of the governing party, having once proposed dropping "Socialist" from its name.

He is popular with voters across the political spectrum but his style and politics, often compared to those of former British premier Tony Blair, have alienated more left-leaning party members.

Already, the Green EELV party ditched its coalition with the Socialists, announcing that it "refuses to participate in a Valls government".

Ultimately, though, analysts expect that he will be able to run a tighter ship than his predecessor.

"He will bring what Jean-Marc Ayrault did not bring, which is quite a different personality than the president," said Bruno Jeanbart of research firm OpinionWay, adding that Valls was also a much better communicator than either Hollande or Ayrault.

It was not change everywhere, however, with Foreign Minister Laurent Fabius keeping his post and even seeing his portfolio extended to include "international development".