* Hollande is "social compromise" - Moscovici
* Doubts remain on delivery and extent of spending cuts
* Left-wing critics accuse Hollande of lurch to right
By Mark John
PARIS, Jan 15 Francois Hollande's allies
dismissed on Wednesday suggestions the Socialist French
president had lurched right with plans to cut public spending
and the taxes on business, hailing what they called a new
"social democrat" vision.
Hollande brushed aside questions about his personal life at
a marathon news conference on Tuesday in which he set out plans
to find at least 50 billion euros of spending cuts between
2015-2017 and reduce corporate charges by 30 billion euros.
That prompted an onslaught of criticism from France's hard
left, which accused of him of a sell-out, and even from the
far-right National Front's Marine Le Pen, who accused him of
converting to "ultra-liberal" economics.
"It's called social democracy ... and social democracy is on
the left," Finance Minister Pierre Moscovici, one of the main
centrist figures in Hollande's Socialist Party, told LCI
"What is being proposed is a social compromise ... it is an
acceleration, an amplification of our line," he replied when
asked if Hollande - who in his 2012 campaign called the world of
finance his "enemy" - had committed a U-turn.
Social democracy is the term used to describe the goal of
creating welfare structures and social solidarity within a
capitalist economy. It is employed most notably in Germany in
the name of the main party of the left.
For over two-and-a-half hours on Tuesday, Hollande batted
away questions about a celebrity magazine's revelations of a
liaison with a French film actress and the future of his
relationship with official partner Valerie Trierweiler.
The setpiece event was intended to expand on Hollande's
conviction that "supply-side socialism" is needed to reform the
euro zone's second largest economy while preserving a generous
welfare model cherished by most French.
"A U-turn of words", the right-leaning Le Figaro newspaper
said in its Wednesday edition. "Hollande set free", the
left-wing Liberation daily said.
Left Party leader Jean-Luc Melenchon accused Hollande of
offering "unreciprocated gifts" to France's company leaders, but
Hollande allies insisted the country's main employers' group
Medef had promised to hire more if charges were cut.
"Increasingly Jean-Luc Melenchon gives the impression of
someone who wants the left to fail rather than succeed," Budget
Minister Bernard Cazeneuve told iTele of the firebrand orator.
Independent economists have given a mitigated thumbs-up to
Hollande's plan, welcoming his recognition of the need to cut
public spending but questioning whether the volume of cuts will
be actually delivered and sufficient to mark a change.
"2014 could be a window of opportunity for Hollande," said
Christian Schulz, senior economist at German bank Berenberg.
"Convincing the left wing of his party and the unions of the
need for supply-side reforms should be easier in times of high
unemployment and economic underperformance," he added.
So far, there has been no clear sign of a revolt from the
left of Hollande's Socialists.
Whereas Germany's Social Democrats disavowed Marxist policy
at a 1959 conference in the Rhineland town of Bad Godesberg,
France's Socialists have never had such a moment and remain a
broad grouping in which centrists rub shoulders with staunch
left-wingers such as Industry Minister Arnaud Montebourg.