PARIS French President Francois Hollande on Monday asked Prime Minister Manuel Valls to form a new government in the wake of a showdown between Valls and Economy Minister Arnaud Montebourg about the government's controversial economic policies.

In a statement, the presidency announced that the prime minister had presented his resignation and that of his ministers Monday morning after Montebourg publicly disavowed the government's deficit-reduction strategy.

Hollande immediately reappointed Valls as prime minister and asked him to form a team "that is coherent with the positions that he (Hollande) defined for our country."

Montebourg, who is famous for his broadsides against multinationals and Europe, hinted Monday that he would not be part of the lineup to be unveiled Tuesday.

The 51-year-old minister, who represents a staunchly leftist faction within the ruling Socialist Party, said he felt the need to "take back his freedom" to continue fighting for what he believed was "right for France."

Montebourg's standoff with Valls was sparked by remarks Montebourg made in an interview with Le Monde newspaper over the weekend in which he called for an end to the government's current course of deficit-cutting.

"The forced-march reduction of deficits is an economic aberration because it aggravates unemployment," he declared.

"France has no vocation to align itself with the ideological axioms of the German Right," he said. "That would mean that even when the French vote for the French Left, in truth they're voting for the program of the German Right," he said.

Valls, a former interior minister, who had warned he would brook no dissent, said his economy chief had "crossed a yellow line."

But rather than fire Montebourg and Education Minister Benoit Hamon, who made similar remarks, Valls obtained the green light from Hollande to sweep clean.

Among those who will not be returning to the front benches is Culture Minister Aurelie Filippetti, a miner's daughter from eastern France and another Montebourg ally.

Filippetti said she would not be a candidate for a new ministerial post.

The divisions in the government reflect the split in the Socialist Party between a pragmatic camp led by Valls and Hollande, and a resolutely leftist camp, which feels betrayed by their business-friendly policies.

The steady trickle of economic data showing the economy still stuck in the doldrums six years into the global financial crisis has confirmed the belief among dozens of Socialist legislators that the government is on the wrong track.

Yet Hollande and Valls have refused to change course, arguing that reforms aimed at boosting the competitiveness of the French industry and create jobs need more time to take effect.

The crisis comes just 147 days after Valls unveiled a "fighting government" that was meant to restore confidence in the ruling party after the drubbing it received in local elections in March.

The tough-talking former interior minister replaced mild-mannered Jean-Marc Ayrault, who had struggled to rein in unruly ministers.

Luc Chatel, secretary general of the conservative Union for a Popular Movement (UMP) party, accused Hollande of being "too busy trying to plug the endless gaps in his parliamentary majority" to tackle the economic crisis.

The vice president of the far-right National Front, Florian Philippot, said the government was "adrift" and repeated the party's calls for snap elections.

(c)2014 Deutsche Presse-Agentur GmbH (Hamburg, Germany)

Visit Deutsche Presse-Agentur GmbH (Hamburg, Germany) at

Distributed by MCT Information Services