* French economy minister urges president to change course
* Says govt should help households, not just business
* Comments signal growing tensions among Socialists
(Adds comment from source close to PM Valls, Elysee no comment)
PARIS, Aug 24 The time has come for France to
resist Germany's "obsession" with austerity and promote
alternative policies across the euro zone that support household
consumption, firebrand French Economy Minister Arnaud Montebourg
said on Sunday.
Deficit-reduction measures carried out since the 2008
financial crisis have crippled Europe's economies and
governments need to change course swiftly or they will lose
their voters to populist and extremist parties, Montebourg told
a socialists' meeting in eastern France.
"France is the euro zone's second-biggest economy, the
world's fifth-greatest power, and it does not intend to align
itself, ladies and gentlemen, with the excessive obsessions of
Germany's conservatives," Montebourg said.
"That is why the time has come for France and its
government, in the name of the European Union's survival, to put
up a just and sane resistance [to these policies]."
Montebourg said consensus was growing among economists and
politicians worldwide on the need for growth-oriented policies
and mentioned his German socialist counterpart Sigmar Gabriel
and Italy's premier Matteo Renzi as potential allies.
He cited former president Charles de Gaulle and former
British prime minister Margaret Thatcher as having effectively
spoken up to change the course of EU policies they opposed.
Montebourg said he had personally asked President Francois
Hollande for "a major re-direction of our economic policy". The
government should now focus less on cutting debt than on
supporting households to revive consumption, a traditional
economic driver, he said.
Montebourg, who makes no secret of his own presidential
ambitions, is known for his frequent attacks on austerity, but
his latest comments are likely to embarrass Hollande, who
despite mounting pressure said just days earlier he would not
back away from his policy based on spending cuts and corporate
Hollande's business-minded policies have alienated many
left-wing lawmakers and voters already frustrated with his
failed pledge to curb unemployment. He is now the most unpopular
president in over half a century, with an approval score of 17
percent in the latest Ifop poll.
Hollande's office declined to comment on what Montebourg
said. A source close to Prime Minister Manuel Valls said
Montebourg had gone too far.
"Firstly, there are declarations on economic policy and
secondly, statements on our European partner Germany that are
extremely harsh. Therefore, considering the line has been
crossed, the prime minister has decided to act," the source
said, giving no further details.
In an interview published on Saturday, Montebourg had
already warned the austerity measures pursued by France and its
European peers were strangling growth.
Six years after the collapse of banking group Lehman
Brothers and the start of the global economic crisis, the United
States and Britain have returned to growth while euro zone
economies are still shrinking or stagnating, he noted on Sunday.
"There is a disease specific to the euro zone, a serious
disease, persistent and dangerous," Montebourg said, arguing
that fiscal and monetary austerity would not help end the crisis
but had only worsened and extended it.
"The time has come for us to take on an alternative
leadership, to set up an alternative motor and promote ideas and
practices alternative to this destructive ideology," he said.
(Reporting by Natalie Huet, additional reporting by Julien
Ponthus, editing by David Evans)