April 2 (Bloomberg) -- With the appointment of Manuel Valls, France has a Tony Blair fan as its new prime minister.
Valls, 51, a market-friendly Socialist, was sworn in yesterday. He replaced Jean-Marc Ayrault, after the Socialist Party was trounced in the nationwide municipal elections on March 23 and 30 that voters used as a referendum on President Francois Hollande’s 22 months in office.
“France has now got a very tough political guy who will seek to take decisions that France has avoided taking since Hollande came into office,” Denis MacShane, Europe Minister in former U.K. Prime Minister Blair’s Labour government and a friend of Valls, said in an interview by telephone from Canada. “He always quotes Tony Blair as his model. He’s a Blairite. He would ask ‘Why is Blair and the Labour government doing more so much better than us?”’ when the two first met more than a decade ago, he said.
Hollande’s government has struggled to rekindle France’s sluggish economy. In January, Hollande unveiled a “Responsibility Pact,” with cuts of 30 billion euros ($40 billion) from business charges, and promised to squeeze government spending to cap unemployment that’s at a 16-year high.
“The president has designed a road map to go further, faster, and to answer the French people’s call for social justice,” Valls said yesterday. “The mayoral elections revealed this call for social justice with force.”
Valls, who was a candidate in the Socialist presidential primaries in 2011, campaigned on market-friendly stances, including the creation of a Small Business Act, an end to the 35-hour workweek and an increase in the minimum retirement age. As a lawmaker in 2010, Valls said the European Commission should have control over national budgets.
In a Sud Ouest newspaper interview in 2009, alluding to the possibility of a Socialist victory in France in 2012, Valls said, “Tony Blair revolutionized the Labor Party in three years and he won. We can do the same if we are really determined. My mission, which is not just mine alone but rather a collective movement, is to rebuild the left.”
Blair took over a Labour Party that had suffered four straight election defeats and delivered three successive victories by adopting business-friendly policies, including most of Margaret Thatcher’s trade union reforms. He sought to deliver public-service improvements without raising taxes.
The appointment of Valls, who may unveil the members of his the new government today, came after the opposition Union for a Popular Movement won a majority in the municipal elections and the anti-euro National Front party boosted its influence.
“Manuel Valls is obviously on the conservative side of the Socialist Party,” said Dominique Barbet, an economist at BNP Paribas SA. “The conservatives won the mayoral elections, so one can reasonably think that Valls choice also answers that vote. It’s the choice of a free-market, social democrat.”
French polls routinely had showed Valls, who was the interior minister, as the favorite to replace Ayrault as prime minister. A BVA poll March 9 said 31 percent favored Valls as prime minister, ahead of Lille Mayor Martine Aubry at 18 percent and Foreign Minister Laurent Fabius at 17 percent.
A Spanish-born former mayor of a town on the outskirts of Paris, Valls’s tough stance on crime made him among the more popular French ministers.
Valls is “a bold choice -- and risky,” said Jim Shields, professor of French politics and history at Aston University in Birmigham, England. “The French Socialist Party is suspicious of ‘reformers’ and ‘modernisers,’ and the comparisons Valls attracts with Tony Blair, for his pro-business sympathies, and Nicolas Sarkozy, for his tough law-and-order line, are hardly calculated to endear him to the Socialist left.”
Valls’s biggest opponents may be within his Socialist Party.
“He’s going to face huge opposition,” from his own party and those who cling to “old Socialist nostrums”, said MacShane. The opposition may come from the “crusted state apparatus” and those who think “the state can always do better than the market,” he said.
To burnish his party credentials, Valls yesterday opened his comments by noting that he was a Socialist and saying that he wanted to be sensitive to the “sufferings of the French.”
The son of a Spanish painter, Valls was born in Barcelona and moved to France before he obtained his French citizenship at the age of 20.
He joined the Socialist Party in 1980 and worked under several administrations, including with Prime Minister Lionel Jospin from 1997 to 2002. He was the mayor of the Paris suburb of Evry from 2001 to 2012.
Appointing Valls, who advocates budgetary discipline and favors adding the target of a deficit of 3 percent of GDP to the constitution, may also be Hollande’s way of showing the European Commission he’ll speed up spending cuts to exit chronic deficits.
“Hollande is sending a message that France will respect its engagements and that it’s still committed to fiscal consolidation and incremental reform,” said Antonio Barroso, an analyst at Teneo Intelligence in London. “By appointing Valls, he guarantees that the government will keep that line.”
In mid-April, France will present its latest budget and economic plan to the Commission. France’s deficit was 4.3 percent of gross domestic product in 2013 instead of the 4.1 percent target set in September, national statistics office Insee said this week. The 4.1 percent goal had already been watered down from the 3.7 percent 2013 deficit promised in April last year.
The Commission last summer gave France a two-year delay to 2015 for lowering its budget deficits below the mandated threshold of 3 percent of GDP.
Valls needs to convince Europe that France’s “contribution to competitiveness and growth will have to be taken into account with respect to its commitments,” Hollande said in a televised address late on March 31, adding that “there can be no question of undermining growth that is just returning.”
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