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French president fires PM, shuffles government after election rout

Hollande hopes shake up will boost popularity; says new government designed to spark job creation

French President Francois Hollande on Monday named Interior Minister Manuel Valls prime minister, replacing Jean-Marc Ayrault in a government reshuffle triggered by a rout for his Socialist Party in local elections. 

Disappointment with the Socialist Party’s handling of the economy drove many voters to vote for conservative or anti-immigrant far-right candidates in Sunday’s elections. Hollande hopes the shake up will boost the government's popularity.

Ayrault conceded that the elections were "a defeat for the government." The administration has failed to fulfill its promises to cut France's more than 10 percent unemployment rate and boost economic growth, which had only climbed 0.3 percent last year, according to figures released Monday.

Addressing the country in a televised speech on Monday, Hollande said a key objective for the new government was the pursuit of a so-called "responsibility pact" to lower employers' costs in order to spark job creation.

Hollande also said he would lower taxes and worker contributions, and that France would have to persuade EU partners to take into account its efforts to boost the economy when examining its commitments to Brussels.

Changes are especially expected in the Finance Ministry, which has scared away investors with high taxes and struggled to find solutions to slow economic growth and growing joblessness.

The biggest winners in Sunday's vote were candidates from the far right National Front, who won mayoral races in 12 towns and took 1,546 city and town council seats, the party said Monday. That's less than some Socialists had feared, but still a record-high number for the party, whose leader Marine Le Pen has tried to soften its xenophobic image and tapped into widespread discontent with mainstream politics.

Meanwhile, bad economic news keeps coming. The state statistics agency said Monday that the deficit shrank less than expected last year — prompting a rebuke from the EU economy commissioner — and debt continued to grow to 93.5 percent of GDP.

Wire services 

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