Hollande to Confront Rebels With Vote as He Clings to Austerity

French President Francois Hollande called a confidence vote in parliament to face down rebel lawmakers who want him to disregard spending curbs imposed by the European Union.

Prime Minister Manuel Valls will set out policy in parliament and ask lawyers to vote to endorse the administration on Sept. 16, Hollande’s office said in a statement today.

Hollande is trying to rally support for an economic agenda that includes budget cuts, easing rent controls, a crackdown on welfare cheats and opening stores on Sundays as his support sinks in opinion polls and the economy stalls.

A week ago, Hollande and Valls reshuffled the cabinet to silence a mutiny within the government. Today’s announcement of the vote in the National Assembly comes after a 40-strong bloc of Socialist lawmakers called on Hollande to use more fiscal stimulus to jump-start the economy and counter a three-year increase in jobless claims.

“To be able to govern, Valls must consolidate his shaken authority,” Ifop pollster director Frederic Dabi said in an interview. “He faces crises on all fronts, economic and political and he has no choice but to take back the reins.”

Valls needs an absolute majority of votes to win confidence in the 577-seat lower chamber of parliament. The Socialists have 290 lawmakers in the assembly and may have the support of additional lawmakers from the center left and other groups.

Ratings Tumble

The risk of losing the vote and facing early legislative elections “exists, of course, but isn’t major,” Dabi said. “The margin of victory will be looked at closely.”

Valls, who was the most popular politician in France last year, has seen his approval rating tumble since taking over from Jean-Marc Ayrault in March. He lost 10 percentage points in the monthly Ifop opinion poll released today which gave him 43 percent. That’s still over twice Hollande’s 19 percent rating, near a historic law for a French leader.

Two days after the vote, the president will hold one of his bi-annual press conference at the Elysee Palace in Paris where he will probably seek to defend his economic policy. Finance Minister Michel Sapin said yesterday that the government won’t achieve its planned 21 billion euros ($28 billion) in spending cuts next year as growth stumbles.

‘Political Chaos’

An index of French manufacturing and services activity remained below 50, the threshold that indicates expansion, for a fourth month in August, Markit Economics said today. That suggests the economy may fail to grow for a third straight quarter in the three months through September, BNP Paribas said.

Still, the problem posed by Hollande’s frail majority are offset somewhat by a political opposition weakened by over two years of infighting.

“We finally have real political chaos, not only among the Socialists but across the political spectrum,” said Francois Cabau, an economist at Barclays Plc in London. “In this context, I have a hard time seeing the big parties defeat a confidence vote. They are disorganized and not in a position to benefit from a crisis.”

Adding to the political turmoil, former President Nicolas Sarkozy may be preparing to return to the political fray after rifts in his UMP party led to the resignation of leader Jean-Francois Cope in June. Sarkozy lost to Hollande in the 2012 general election.

“I don’t know his decision but we won’t have long to wait,” former interior minister Brice Hortefeux said today on France Info radio. Candidates for the party presidency need to declare by Sept. 30, so “the decision will be made in the coming days.”

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