Mike Shedlock

Further compounding president Francois Hollande's problem with the European Commission Rejection of France's Proposal for Deficit Target Leniency, the socialists are in open revolt against new Prime Minister Manuel Valls.

The socialists consider Valls as too pro-business. They want less austerity and a reduction in personal taxes, not corporate taxes. And they are against Hollande's "responsibility pact" proposal that would reduce labor costs and cut government spending.

Via translation from Les Echos, please consider Socialist MPs Threaten a Vote of No Confidence on Account of Valls

Nearly a hundred of Socialist deputies signed a document calling for political change of course and threaten a vote of no confidence in the government on Tuesday. The members of parliament (MPs), groggy out of defeat in local elections, gain momentum to contest the elements of "pact of responsibility."

Jean-Marc Germain, leader of "rebuilders" and very close to the mayor of Lille Martine Aubry, warned Friday that 65 members wanted to get "insurance", including a stronger role for Parliament. Ranks have swelled with the release of a "contract of majority" launched by Pouria Amirshahi among others, Jean-Marc Germain or Laurence Dumont, Vice-President of the Assembly.

This text calls for the Government to consult further their majority and to reorient its policy and that of Europe to fight austerity, investing directly for employment and to favor a "demand shock" through measures favor of purchasing power.

President Francois Hollande promised on Jan. 14 to engage the responsibility of the Government to the pact of responsibility, which includes a reduction of labor costs by 10 billion euros. But the government reshuffle and increasingly hard criticism by the socialist majority have changed the situation.

The absence of policy change line has weighed heavily in the decision environmentalists and casts uncertainty over their vote Tuesday. Fran├žois Hollande and his government are thus caught between two fires, the majority of which are increasingly demanding the end of austerity and that of the European Commission, for the moment, refuses to France a additional time to achieve its deficit reduction.

Demand Shock Spending Spree Not Coming

In light of the EC's rejection of Valls' request for more time to meet deficit reduction targets, its safe to say a French spending spree is not coming. It will be amusing to see what sleight of hand magic Hollande proposes in its next budget proposal to Brussels.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Read more at http://globaleconomicanalysis.blogspot.com/2014/04/french-socialists-revolt-against-prime.html#jL3lwH4kKI0XKvQP.99


Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.