Manuel Valls has offered his resignation as Prime Minister and all his ministers will be in line for a re-shuffle tomorrow.
Francois Hollande was in Brittany, but will almost certainly ask Valls to form a new government. The crisis has been precipitated by a speech made by Economics Minister, Arnaud Montebourg over the weekend. Montebourg has always been a "loose cannon", but has considerable support on the left of the Party. He called for a change of direction in economic policy, including the abandonment of the target to reduce the budget deficit to below 3% of GDP as demanded by the EU economic policy. He claims (in common with politicians of both left and right) that it is leading to stagnation and hence unemployment.
Also in the firing line is the "loi Duflot", a housing policy introduced by the then Minister for Housing, Green Party leader Cecile Duflot. Industry leaders have called it a disaster for the construction industry, resulting in a 20% reduction in construction in the last 12 months. Duflot quit the government in the previous re-shuffle and has today published a memoir with a scathing attack of Hollande.
Predictably, and understandably, opposition leaders in the UMP and Front National have been calling for a dissolution of the Assembly.
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