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Economy Minister Arnaud Montebourg, gestures as he speaks during a panel of the Open Internet Project in Paris, Thursday, May 15, 2014. (Michel Euler/AP)
Economy Minister Arnaud Montebourg, gestures as he speaks during a panel of the Open Internet Project in Paris, Thursday, May 15, 2014. (Michel Euler/AP)

New French cabinet ousts rebel voices, but little change to economic direction Add to ...

The new government approved on Tuesday by President François Hollande squelched important voices of dissent from the left wing of his Socialist Party but signaled little change of direction on economic policies that have left the French economy mired in stagnation.

The marginal changes, analysts said, mean that France, Europe’s second-largest economy after Germany, could be in for a long slog toward recovery, with consequences for both Hollande’s already weak political standing and the wider European economy.

Reuters Aug. 26 2014, 3:54 PM EDT

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“He is changing the government without changing the direction of policy, which is a bad thing,” said Jean-Paul Fitoussi, a professor of economics at the Institut d’Études Politiques de Paris. “We are in a world of uncertainty, and they need to be reactive to a dangerous new phenomenon that has appeared, which is stagnant growth.”

After publicly criticizing Hollande’s economic policies, Arnaud Montebourg, France’s combative economy minister and a prominent voice of the left wing of the governing Socialist Party, was pushed out in the reshuffling - the second Cabinet shake-up in six months.

Making clear that he and the president would brook little dissent, Prime Minister Manuel Valls kept a trusted lieutenant, Michel Sapin, a career politician and a close friend of Hollande, as finance minister to oversee the nation’s accounts.

And he named Emmanuel Macron, 36, a former investment banker at Rothschild who has been a deputy secretary general at the Élysée Palace since 2012 and a close adviser to Hollande on economic policies, as the new economy minister, replacing Montebourg.

But in a sign that Valls is seeking to ensure his party’s backing, he asked parliament on Tuesday to hold a rare vote of confidence on the new government in September or October. “The majority will have to be there,” he said of the vote in an interview on French television. “If we don’t get a majority, it’s over - we cannot continue.”

Both men were expected to press ahead with Hollande’s economic program, including a package of spending cuts totaling 50 billion euros, or $66 billion, through 2017, and a package of tax measures for employers designed to stoke hiring.

The moves appeared to trim the ideological breadth of the Cabinet at the expense of the left. But analysts expected that they would do little to alter the course Hollande has trod in trying to keep his Socialist Party with him while also appeasing European Union officials who want countries to mend their public finances by reducing budgets.

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