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Will reshuffle revive French fortunes?

Tuesday, April 01, 2014 - 01:33

Apr.01 - French car sales are up and there's more positive data on manufacturing. With a new prime minister and tax cuts on the way, Joanna Partridge asks if France is about to turn a corner?

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The man French President Hollande is pinning his hopes on. He made Interior Minister Manuel Valls his new prime minister. Valls replaces Jean-Marc Ayrault who - with other ministers - took the blame for the Socialists' defeat in local elections. That defeat led Hollande to reshuffle his cabinet - he's also promised key economic changes, including cuts in labour charges for business and lower taxes to boost consumer spending. SOUNDBITE: NEW FRENCH PRIME MINISTER MANUEL VALLS SAYING (French): "The president of the Republic has a road map in order to go even further, even faster and of course to answer the call for justice - and I know it is important to you - social justice in our country." After 22-months in power, Hollande has failed to turn around the euro zone's second-largest economy. But the outlook isn't entirely negative. France's manufacturing sector returned to growth last month. And car sales rose again in March - up almost 9%. Grant Lewis from Daiwa Securities doesn't think it's fair to call France the sick man of Europe. SOUNDBITE: Grant Lewis, Head of Economic Research, Daiwa Securities, saying (English): "The French PMIs had been weak, actually they've come back, they've recovered over the past couple of months. To be honest there isn't an economy that there really is to be worried about." That's not to say Hollande doesn't have his work cut out turning around the French economy. And it's not just voters he needs to keep happy. He must also speed up the rate he's cutting his budget deficit. Euro zone finance ministers have warned him to keep to the EU's 2015 deadline - which they've already extended once.

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Will reshuffle revive French fortunes?

Tuesday, April 01, 2014 - 01:33