PARIS French President Francois Hollande appointed a close friend and former European affairs minister to the strategic post of his chief of staff on Wednesday and reshuffled his private office to tighten the country's relations with Brussels.
The nomination of Jean-Pierre Jouyet as secretary-general of the presidency was also designed to ensure better coordination with the government of new Prime Minister Manuel Valls, Hollande told the daily Le Monde.
Separately, Valls appointed Socialist Party Secretary Harlem Desir to run the European Affairs ministry. It was the first government post for Desir, 54, who has struggled during his 18 months at the helm of the Socialist Party to hold back dissent. He has been a member of European Parliament since 1999.
The Socialists lost local elections last month, where low turnout and the success of the far-right party were seen as a rejection of the party's policies. The losses prompted Hollande to name Valls, the popular interior minister, as prime minister.
France's relations with the EU are set to enter a tense new phase, with Hollande and other ministers signaling they want to discuss with Brussels French commitments on public deficit, which Paris has repeatedly failed to bring within EU targets.
Jouyet, 60, director-general of the state-owned bank Caisse des Depots (CDC), is a well-connected political operator with deep European experience. The Catholic social democrat was a senior aide to former European Commission President Jacques Delors and former Socialist Prime Minister Lionel Jospin.
But his acceptance of a role in conservative President Nicolas Sarkozy's government in 2007 as minister for European affairs is still considered a betrayal by some on the Left.
That prompted Hollande to exclude Jouyet, his class-mate at France's Ecole Nationale d'Administration civil service college, from his initial line-up in 2012. But a source close to the president said: "They are very old friends and it's not just European affairs that spurred his appointment.
"Jean-Pierre Jouyet has a lot of tricks up his sleeve, including on financial matters, which are also important now," the source said. Hollande has promised to ease the tax burden on companies in return for more job creation.
The president also reorganized the government office in charge of coordinating European policy among ministries, making the General Secretariat for European Affairs (SGAE) report directly to himself instead of to the prime minister.
At its head, he appointed his European adviser, Philippe Leglise-Costa, in a move to mirror a similar structure in German Chancellor Angela Merkel's office.
Leglise-Costa is to travel to Brussels on Thursday to brief European Commission President Jose Manuel Barroso's staff on France's deficit cutting plans and the implementation of the "responsibility pact", a presidential source said.
Brussels has already granted France two additional years until 2015 to bring its deficit down from 4.3 percent of Gross Domestic Product last year to an EU target of 3 percent.
The party's trouncing in local elections was seen not just as a blow to Hollande, whose approval ratings are at historic lows, but to the efficacy of Desir as party leader, viewed as lacking the charisma needed to keep the fractious party united.
France's EU policy is mostly handled by the president's office and the finance ministry.
Before his nomination, sources close to Hollande had told Reuters the government was "looking for an exit" for Desir. He replaces Thierry Repentin, who acknowledged he had little knowledge of EU affairs.
Naming Desir to a ministerial post avoids having to hold a party congress to choose a new party head. Jean-Christophe Cambadelis, 63, an ally of former party head Martine Aubry, is be named the new secretary.
(Reporting By Alexandria Sage and Emmanuel Jarry, Writing by Alexandria Sage; Editing by Paul Taylor and Mark John)