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New French government seeks confidence vote to save reform

French President Francois Hollande (R) escorts newly-named Prime Minister Manuels Valls after the first cabinet meeting of the new governmen
French President Francois Hollande (R) escorts newly-named Prime Minister Manuels Valls after the first cabinet meeting of the new governmen

By Alexandria Sage

PARIS (Reuters) - France's newly formed government will seek a confidence vote from parliament on Tuesday, a step that would allow it to press ahead with President Francois Hollande's business reforms to spur growth without having to risk a separate vote.

New Prime Minister Manuel Valls approved the vote during his first cabinet meeting as his reshuffled team of 16 Socialist ministers strives to present a united front after the Greens party broke away from the coalition over energy policy.

Hollande has staked his credibility on plans for a so-called "responsibility pact" that offers payroll tax cuts to companies in exchange for promises of more hiring, after failing to lower unemployment during his first two years in power.

But the reform may prove difficult to implement in full, as both unions and employers doubt companies will agree to setting measurable hiring targets in exchange for an estimated 10 billion euros ($14 billion) in tax breaks, as Hollande has intended.

"On Tuesday afternoon, the prime minister will present a general policy speech and there will be a vote of confidence," government spokesman Stephane Le Foll told a news briefing after the cabinet's first meeting on Friday.

"We are in a new stage, a second stage of (Hollande's) five year mandate," Le Foll said. "It's the general policy speech of the prime minister that will outline the stakes and the overall themes."

ELECTION DRUBBING

Hollande originally intended to tie the vote of confidence to a subsequent vote on the responsibility pact.

However, holding two separate votes would have raised the risk of rejection in parliament due to opposition from the far-Left and the Greens, who this week said they would not join Valls' reshuffled government.

The reshuffle, coming 22 months after Hollande's May 2012 election, saw Valls replace Jean-Marc Ayrault at the helm of a smaller cabinet which he has dubbed a "government of combat" able to halt France's economic decline.

The reshuffle was prompted by the Socialist Party's weak showing in local elections on Sunday in which Marine Le Pen's far-right National Front won 11 town halls.

"In town hall elections, the French expressed displeasure, anxiety, and above all a demand for results," Hollande told the cabinet on Friday after meeting privately with Valls.

Besides the responsibility pact, Hollande stressed reviving long-term growth, spoke of a "solidarity pact" including lower taxes and charges for workers, and defended renewable energy.

However, given the presence in government of ministers from the center and far-left wings of the Socialist Party, he may struggle with infighting and mixed messages.

Whereas Valls leans more right, new Economy Minister Arnaud Montebourg is an outspoken anti-globalization leftist known for attacks on the European Commission.

Environment Minister Segolene Royale is the former live-in partner of Hollande and mother of his four children who was defeated by Nicolas Sarkozy in the 2007 presidential election.

Valls is likely to win the vote of confidence on Tuesday even without support from the Greens as the Socialists retain a slim majority in the National Assembly, the lower house of parliament, with 291 deputies out of a total of 577.

(Editing by Alison Williams)

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