Leftist Montebourg wins more power in new French cabinet

Wed Apr 2, 2014 7:09am EDT

* Anti-globalisation campaigner attacks EU austerity drive

* Montebourg feuded with foreign CEOs, intervened in deals

* He stopped Yahoo buying French online video-sharing firm

* Some believe he helps to keep support of left wing voters

By Nicholas Vinocur

PARIS, April 2 (Reuters) - Leftist Arnaud Montebourg, known for attacking big business and the European Commission, reaped a political harvest on Wednesday when he was put in charge of an enlarged economy and industry ministry in a choice that may unnerve Brussels and Berlin.

The anti-globalisation campaigner with film star looks was one of the winners in a shakeup that saw President Francois Hollande name former interior minister Manuel Valls as prime minister after his Socialist Party was routed in local elections.

Montebourg has been the most outspoken member of Hollande's team, a champion of protectionism who has openly accused the European Union executive of strangling Europe's economy with austerity policies he says are misguided.

"I think we have the chance to succeed, to succeed by pushing Europe in a new direction, because for now it is Europe that is pushing us toward austerity," he told France Inter radio on Tuesday. "What we need is pragmatism and to change the ideas of the Commission."

His elevation may also be unwelcome for German Chancellor Angela Merkel. Montebourg has compared her with Otto von Bismarck, the 19th century chancellor who unified Germany with an iron fist.

At the helm of the Ministry for Industrial Renewal since 2012, Montebourg has drawn fire from business leaders and some allies for his public feuds with foreign CEOs and interventions into business affairs.

The 51-year-old bachelor told Lakshmi Mittal, the Indian-born chief executive of the ArcelorMittal steel group, that he was not welcome in France. Montebourg also drew much attention in international media for his exchange of acerbic letters with Texan tyre executive Maurice Taylor.

He intervened last year to prevent Yahoo buying a majority stake in French online video-sharing champion Dailymotion from incumbent telecoms operator Orange, in which the state owns a 28.4 percent stake.

And in a recent sortie, Montebourg openly favoured an offer by construction and telecom giant Bouygues to acquire mobile operator SFR over rival Numericable, hours before a bid deadline was due to expire and while shares in all the firms were trading.

NECESSARY NUISANCE?

But despite accusations that Montebourg is a liability for the business community and an embarrassment to the government, he has consolidated his role as a champion of French industrial interests against unregulated capitalism.

Author of a book advocating "deglobalisation", he was the best known abroad of the 35 ministers in Hollande's first government, overshadowing the more circumspect Finance Minister Pierre Moscovici, who has been dumped.

He won exposure with his "Made in France" campaigning, modeling a blue-and-white hooped fisherman's jersey on posters to promote French-made goods.

Some critics in government argue that Montebourg is a necessary nuisance, whose provocative positions help to keep the support of left-wing voters who might otherwise defect to populist parties on the far left or extreme right.

When Montebourg offered to resign in 2012 after a public clash with Prime Minister Jean-Marc Ayrault over the closure of a Mittal steel plant, Hollande turned him down. Ayrault quit on Monday after the Socialist election defeat.

Montebourg's rise to prominence as a politician took a different path from that of other government ministers.

A lawyer by training who won distinctions for eloquence as a student, he failed to gain admission to the elite ENA civil service school and worked his way up the ranks of the Socialist Party, winning election in his home Saone-et-Loire region.

His break in national politics came in 2011 when he came a strong third in a Socialist primary for the 2012 presidential election. Hollande rewarded Montebourg for his support against conservative Nicolas Sarkozy by giving him the industry portfolio, a difficult task due to factory closures and heavy blue-collar job losses.

In his first months in the job, Montebourg repeatedly sided with trade unions against chief executives over the closures of a Peugeot factory near Paris and blast furnaces operated by ArcelorMittal in eastern France.

In both cases Montebourg attacked the bosses in public and ended up losing his fight while suffering criticism.

His latest action against Numericable - whose Franco-Israeli chief executive he criticised for paying his taxes in Switzerland - hints at a change in strategy from siding with unions to picking corporate champions. (Reporting By Nicholas Vinocur; Editing by Paul Taylor and David Stamp)

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