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France In "Political Turmoil" After Hollande Unexpectedly Dissolves Government

Tyler Durden's picture




 

Earlier this morning, those expecting an out of control European deflationary tumble got one step closer to their goal when French President Francois Hollande asked his prime minister, who only assumed the post a few short months ago in March, to form a new government, following what Reuters reported was him "looking to impose his will on the cabinet after rebel leftist ministers had called for an economic policy U-turn" spearheaded by economy minister Arnaud Montebourg demanding an end to French "austerity." The Guardian is somewhat more direct and to the point: "France has entered uncharted political waters after the prime minister, Manuel Valls, presented his government's resignation amid a political crisis triggered by his maverick economy minister who called for an end to austerity policies imposed by Germany."

In short: just days after we reported that trouble was brewing in socialist paradise, when the rating of Venezuela's Maduro tumbled to all-time lows, socialism is once again in turmoil, this time in France.

The details:

The prime minister, a social democrat who has been compared to Tony Blair, acted with characteristic swiftness in a bid to reassert his authority. His aides had let it be known on Sunday that the economy minister, Arnaud Montebourg, had crossed a "yellow line" for his dual crime of criticising both the president of France and a valued ally.

 

Montebourg, 51, fired his first broadside in an interview with Le Monde on Saturday and followed up with a speech to a Socialist party rally the following day. In a veiled reference to President François Hollande, he said that conformism was an enemy and "my enemy is governing". "France is a free country which shouldn't be aligning itself with the obsessions of the German right," he said, urging a "just and sane resistance".

 

He was joined in his criticism by the education minister Benoit Hamon, who on Monday denied that he had been disloyal. A third minister, Aurélie Filipetti, also appeared in danger of losing her job after wishing a "good day" on Twitter to her two dissident colleagues.

Perhaps in an ironic case of poetic justice, she will also be terminated via Twitter? Meanwhile, nothing changes for France where other people's money appears to have run out:

Hollande, who is politically weakened with his approval rating at an all-time low of 17%, asked Valls to form a new government "consistent with the direction set for the country", which is expected to be announced on Tuesday. Valls has pledged to stick to a course in which deficits would be cut while the tax burden on businesses would be eased, bringing him into conflict with the left wing of the party represented by Montebourg. The changes have not yet been carried out, unemployment is at nearly 11% and growth in 2014 is forecast to be only 0.5%.

 

Now, with the fragmentation of the left bursting into the open, Montebourg is scheduled to deliver a speech later on Monday.

 

Centre-right politicians had called for the economy minister to step down, while some Socialists recognised that it was illogical for an economy minister to attack his own government's economic policies. The National Front is demanding the dissolution of parliament.

 

The challenge for Valls will be to put together a government that can win the approval of the national assembly, despite the revolt by the Socialist party's left flank and desertion by the ecologists.

There is some hope that not every minister will become a ward of the state:

Analysts said that Valls was likely to keep Hollande loyalists in the cabinet, including the finance minister, Michel Sapin, the agriculture minister, Stephane Le Foll, and the defence minister, Yves Le Drian. But the justice minister, Christiane Taubira, could be among those to pay the price of falling out with Valls.

 

It remains to be seen whether Valls, who became prime minister in March, will be allowed more leeway in forming his new government, compared with the outgoing cabinet that reflected the internal contradictions of Hollande himself. Le Parisien reported on Monday that he had said to Hollande "it's him or me". referring to Montebourg.

Finally, it is not just the left that is turmoiling. So are the moderates on the center/right:

The crisis is unfolding as politicians already have an eye on the next presidential elections in 2017. Montebourg may now see himself as the flag-bearer of the left, while Valls until now has remained popular in the country as a whole although his popularity ratings have also shrunk.

 

The centre-right UMP is also in crisis, however. Former president Nicolas Sarkozy has not yet announced whether he intends to run although he is widely expected to do so. But former prime minister Alain Juppé, mayor of Bordeaux, and former agriculture minister Bruno Lemaire , have said in the last few days that they would take part in a primary.

The biggest winner from the latest socialist fiasco: the extreme, far right National Front, whose leader Marine Le Pen was one of the biggest winners in this year's European Parliament elections. And so Europe once again goes full circle as the rise of nationalism inevitably follows the now cyclical economic collapse which follows Europe every few decades.

Meanwhile, European stocks soar thanks to both this, and the weaker than expected German IFO Business Climate print, as an out of control European deflationary collapse simply means more "easing" by the ECB (if only for the 1%), which after already being backlogged by the previously announced OMT, TLTRO, and ABS, now has QE on its "to do" list as well.

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Mon, 08/25/2014 - 08:04 | 5139778 GetZeeGold
GetZeeGold's picture

 

 

Socialism fails again.....how many times is that now?

Mon, 08/25/2014 - 08:09 | 5139793 SoberOne
SoberOne's picture

The Vampire Squids doing, most  likely. 

Mon, 08/25/2014 - 08:18 | 5139822 Latina Lover
Latina Lover's picture

It's Putins fault, of course. How dare Russia boycott French food!

Mon, 08/25/2014 - 08:22 | 5139831 NoDebt
NoDebt's picture

There was austerity?

Geez, maybe I was on vacation longer than I thought.

Mon, 08/25/2014 - 08:29 | 5139854 insanelysane
insanelysane's picture

There is only Abenomics, everything else is a degree of Austerity.  Come to think of it, Abenomics is a degree of Austerity.  Oh well, forget I posted anything.

Mon, 08/25/2014 - 08:36 | 5139883 wallstreetapost...
wallstreetaposteriori's picture

This has to be bullish for the periphery.  Fuck it... if you like your union you can keep your union, and if you dont like your union you can break it and unleash massive amounts of bullish QE.  

Mon, 08/25/2014 - 08:33 | 5139875 MalteseFalcon
MalteseFalcon's picture

The only thing more interesting than political inside baseball is French political inside baseball.

 

ZZZZZZZZZZZZZzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

Mon, 08/25/2014 - 10:00 | 5140262 A Nanny Moose
A Nanny Moose's picture

Freedom Fries! Bytchez!

Mon, 08/25/2014 - 08:11 | 5139796 Headbanger
Headbanger's picture

What a concept!

If only we would do it here too!

Mon, 08/25/2014 - 08:34 | 5139877 PartysOver
PartysOver's picture

Not out of the question.  FEMA Camps, militarization of local law enforcement,  military planning for riot control.....  All in the USSA.   Table is set, only Q is finding the tipping point.

Mon, 08/25/2014 - 08:40 | 5139895 GetZeeGold
GetZeeGold's picture

 

 

All we have to do now is kill about 10 million people....can we get someone on that?

 

No worries....we've already got the damn bullets. We've got billions of them.......with a B!

Mon, 08/25/2014 - 10:49 | 5140504 JRobby
JRobby's picture

The lab boys have been working overtime on this problem obviously.

They get a bonus in the form of a 40 acre spread in Uraguay within a secured region.

Mon, 08/25/2014 - 10:07 | 5140271 A Nanny Moose
A Nanny Moose's picture

Dissolves Government.

Words that all true abollitionist love.

Tue, 08/26/2014 - 00:20 | 5143659 StychoKiller
StychoKiller's picture

Can I get a Gallon bottle of that?  Chlorine Bleach ain't working!

Mon, 08/25/2014 - 08:12 | 5139801 Seize Mars
Seize Mars's picture

The batting average is holding steady at 100%.

Mon, 08/25/2014 - 08:14 | 5139810 TahoeBilly2012
TahoeBilly2012's picture

Can't the people "dissolve" Hollande? I wish the people could scrap a Government as easily as they can scrap themselves, just seems like a reshuffle at best.

Mon, 08/25/2014 - 08:21 | 5139829 GetZeeGold
GetZeeGold's picture

 

 

I wish the people could scrap a Government

 

Those guys are king at that...it usually involes beheadings and heads on pikes.....kinda like ISIS.

 

Remember the Vendee.....cause it's illegal to talk about in France.

Mon, 08/25/2014 - 09:50 | 5140200 Martian Moon
Martian Moon's picture

No you can't dissolve government

You can only pick flavour A or flavour B

See? you get to choose who rapes you

You have choice

Mon, 08/25/2014 - 10:08 | 5140309 A Nanny Moose
A Nanny Moose's picture

Ain't Dem0ckracy grand?

Mon, 08/25/2014 - 08:23 | 5139838 Azannoth
Azannoth's picture

failed politicians should be dissolved in Nitric Acid, that would solve some problems :)

Mon, 08/25/2014 - 08:14 | 5139808 CH1
CH1's picture

Socialism fails again.....how many times is that now?

So long as envy continues, it doesn't really matter. It'll keep coming back.

Mon, 08/25/2014 - 08:48 | 5139910 PT
PT's picture

Grow up, both of you.

Socialism, communism, capitalism ... at this point they are all just words to send the little people scurrying around in circles.  The "big" people in the room don't need to worry about such trivialities.  They simply have action, and propaganda to justify their action within the dominant paradig-

Don't listen to PT!  When we don't like the laws, we lobby the govt and get them changed!  It is democracy in action!!!  And when we don't like the goverment, we work real hard, save our pennies and buy our own government!!!  Now get off your lazy ass and do some goddamn work and you too can one day change laws and buy the government you deserve.  But if you can't afford to buy your own gummint then you obviously didn't do enough work you lazy slacker so you got the gummint you deserve!!!

We bought our governments fair and square.  It was a genuine anarcho-capitalist free-market transaction!!!

Hugs!  Yours truly
Blankfein, Dimon, Corzine, the Squid et al ...

 

Mon, 08/25/2014 - 10:53 | 5140519 JRobby
JRobby's picture

+1000

They are just jealous of Putin, China, etc. for being so up front with their oppression. They are held back by this silly constitutional argument that pops up occasionally. Really? What constitution?

Mon, 08/25/2014 - 13:57 | 5141250 malek
malek's picture

I downvoted you because:

If someone tries to muddy the waters what exactly "socialism", "capitalism" and all the other -isms really stand for, it is in no way helpful to propose "hey let's just ignore all the -isms [including their true meanings behind them]" because that will only ensure the day after the collapse nobody has the slightest idea how to do a better approach.

Mon, 08/25/2014 - 17:23 | 5142123 PT
PT's picture

Fair enough.  Good point and thank you for spelling it out for us.  But when anyone ever points out any faults with Practical Capitalism, the common retort is, "Oh, that's not Real Capitalism, that is Crony Capitalism."  Further argument then reveals that "Real" Capitalism only ever "really" exists in RainbowUnicornFairyLand ... while no-one ever bothers to make a distinction between "Crony Communism" and "Real Communism", "Crony Socialism and Real Socialism, Crony Monarchies and Real Monarchies (all we have to do is find a king who really is all wise, all knowing, all loving!)  etc, etc, etc ...

... or real Capitalism and Democracy are practised by the Squid et al, as I explained above.

 

Mon, 08/25/2014 - 08:34 | 5139876 TheReplacement
TheReplacement's picture

Only every time.

Mon, 08/25/2014 - 09:21 | 5140037 Thom_333
Thom_333's picture

Socialist shitheads are conditioned to always do what they do...and fail. Look at the shining example of the socialist predecessor Mitterand. Tried the same but had to call it quits when  large amount of french capitalists and capital just upped and left. Including the French Rotschilds. Hey wait aminute...that good or bad...?? Naah...kinda  liked the Eyes wide Shut movie. Why don´t I get invited to those parties?

Mon, 08/25/2014 - 09:47 | 5140190 Freddie
Freddie's picture

I guess he showed Putin and the Russians.  

Mon, 08/25/2014 - 10:52 | 5140518 rwe2late
rwe2late's picture

 We need some more precise terminology.

NEO-conservatives are fake conservatives.

NEO-liberals are fake liberals.

Hollande, the fake socialist, might best be called a NEO-socialist.

 

The critical prefix "NEO" indicating the true core ideology,

the word prefixed indicating merely the politics advertised while seeking popular support.

 

Mon, 08/25/2014 - 08:06 | 5139779 Brazen Heist
Brazen Heist's picture

If the Euro as we know it lasts for another 5 years......it will be a miracle. 

 

Mon, 08/25/2014 - 08:09 | 5139784 GetZeeGold
GetZeeGold's picture

 

 

The Euro was designed to fail.....but the system it was designed to bring in has also failed....which leaves us at scratch.

 

I would also like to state at this point....I don't own a nailgun.

Mon, 08/25/2014 - 08:13 | 5139806 Brazen Heist
Brazen Heist's picture

It was designed to last forever...."a thousand years", like all statist experiments. 

What they didn't tell you is that the USSR never collapsed, it moved to Europe. 

It will last only if Europeans will take enough "internal devaluations" until they are about as poor as their southern neighbours in Africa. After which, the migration will stop at least, because there won't be any point for it any longer. 

Mon, 08/25/2014 - 08:15 | 5139813 TahoeBilly2012
TahoeBilly2012's picture

You are going to make Bono cry, stop this.

Mon, 08/25/2014 - 08:35 | 5139879 TheReplacement
TheReplacement's picture

That's okay.  A shitgum or a tall building will work too.

Mon, 08/25/2014 - 13:59 | 5141264 malek
malek's picture

Don't underestimate the will of people to never admit any mistake.

Mon, 08/25/2014 - 08:08 | 5139786 Irishcyclist
Irishcyclist's picture

This news is about 5 hours old at this point.

CAC is up 1%. 

The disconnect continues uninterrupted.

 

Mon, 08/25/2014 - 08:09 | 5139788 coulous
coulous's picture

And what's the deal with rating agencies ? Moodys, S et P : nobody wants degrade France ??

Mon, 08/25/2014 - 08:11 | 5139799 DavidC
DavidC's picture

Nah, they'll get into trouble if they do!

DavidC

Mon, 08/25/2014 - 09:43 | 5140169 astoriajoe
astoriajoe's picture

I'm sure the Germans do. They are into some crazy stuff over there.

what? not what you meant?

Mon, 08/25/2014 - 10:55 | 5140532 JRobby
JRobby's picture

While they are handing out big fines..............(laugh track deafening)

When do Moody's & S&P get their fines for their contribution to "the crisis" of wealth transfer?

Fucking humps.

Mon, 08/25/2014 - 08:09 | 5139790 Benedict Farse
Benedict Farse's picture

What a load of CAC.

Mon, 08/25/2014 - 08:09 | 5139791 GriP
GriP's picture

Hollande fired the prime minister allegedly because he knew how to do Math.
The Socialist dream must go on.

Mon, 08/25/2014 - 08:12 | 5139798 GetZeeGold
GetZeeGold's picture

 

 

The quest for other peoples money......is on.

Mon, 08/25/2014 - 08:18 | 5139823 the not so migh...
the not so mighty maximiza's picture

Was it ever...off?

Mon, 08/25/2014 - 08:23 | 5139832 HardlyZero
HardlyZero's picture

"Yellow Line"...ok

Arnaud Montebourg, had crossed a "yellow line" for his dual crime of criticising both the president of France and a valued ally.

 

but they better not cross the gold line...like grabbing the gold.    (or people's gold).

Like early 70's to Nixon, when the French started demanding Gold and there wasn't any there...this could get interesting.

If Argentina, France...other socialist start unravelling...then gold may rise again as an economic 'issue'.

Mon, 08/25/2014 - 08:34 | 5139873 IPURDOM75
IPURDOM75's picture

He didn't fire him. Actually it's the contrary.

Mon, 08/25/2014 - 08:13 | 5139811 Seize Mars
Seize Mars's picture

They're having to backpedal and change their story. Ha

Mon, 08/25/2014 - 08:18 | 5139821 Bioscale
Bioscale's picture

This is worth of reading:

http://ericmargolis.com/2014/08/cautious-outrage/

The alleged beheading of freelance journalist James Foley by the shadowy ISIS (or Islamic State) has sparked outrage and horror around the globe.

I say “alleged” because we are not sure if the decapitation was real or faked.

Mon, 08/25/2014 - 08:38 | 5139889 TheReplacement
TheReplacement's picture

Fake or not, the most interesting thing was the words he said before it was done. 

If real, he knew he was going to die and still called on his framily to rise up against the US.

If fake, he still called on his framily to rise up against the US.

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