Hollande allies hail new `social democrat` vision

Paris: Francois Hollande`s allies dismissed on Wednesday suggestions the Socialist French president had lurched right with plans to cut public spending and the taxes on business, hailing what they called a new "social democrat" vision. Hollande brushed aside questions about his personal life at a marathon news conference on Tuesday in which he set out plans to find at least 50 billion euros of spending cuts between 2015-2017 and reduce corporate charges by 30 billion euros.

That prompted an onslaught of criticism from France`s hard left, which accused of him of a sell-out, and even from the far-right National Front`s Marine Le Pen, who accused him of converting to "ultra-liberal" economics. "It`s called social democracy ... and social democracy is on the left," Finance Minister Pierre Moscovici, one of the main centrist figures in Hollande`s Socialist Party, told LCI television. "What is being proposed is a social compromise ... it is an acceleration, an amplification of our line," he replied when asked if Hollande - who in his 2012 campaign called the world of finance his "enemy" - had committed a U-turn. Social democracy is the term used to describe the goal of creating welfare structures and social solidarity within a capitalist economy. It is employed most notably in Germany in the name of the main party of the left. For over two-and-a-half hours on Tuesday, Hollande batted away questions about a celebrity magazine`s revelations of a liaison with a French film actress and the future of his relationship with official partner Valerie Trierweiler. The setpiece event was intended to expand on Hollande`s conviction that "supply-side socialism" is needed to reform the euro zone`s second largest economy while preserving a generous welfare model cherished by most French. "A U-turn of words", the right-leaning Le Figaro newspaper said in its Wednesday edition. "Hollande set free", the left-wing Liberation daily said. Left Party leader Jean-Luc Melenchon accused Hollande of offering "unreciprocated gifts" to France`s company leaders, but Hollande allies insisted the country`s main employers` group Medef had promised to hire more if charges were cut. "Increasingly Jean-Luc Melenchon gives the impression of someone who wants the left to fail rather than succeed," Budget Minister Bernard Cazeneuve told iTele of the firebrand orator. Independent economists have given a mitigated thumbs-up to Hollande`s plan, welcoming his recognition of the need to cut public spending but questioning whether the volume of cuts will be actually delivered and sufficient to mark a change. "2014 could be a window of opportunity for Hollande," said Christian Schulz, senior economist at German bank Berenberg. "Convincing the left wing of his party and the unions of the need for supply-side reforms should be easier in times of high unemployment and economic underperformance," he added. So far, there has been no clear sign of a revolt from the left of Hollande`s Socialists. Whereas Germany`s Social Democrats disavowed Marxist policy at a 1959 conference in the Rhineland town of Bad Godesberg, France`s Socialists have never had such a moment and remain a broad grouping in which centrists rub shoulders with staunch left-wingers such as Industry Minister Arnaud Montebourg.