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"Real victory will be in 5 years," says Macron camp after election win


Reuters

UPDATE 3-"Real victory will be in 5 years," says Macron camp after election win


* Macron's coalition wins 350 of 577 parliamentary seats
    * Result is strong mandate for pro-growth reforms
    * France must watch deficit, says Moscovici
    * France could become Europe's strongest economy -Berenberg
    * Under-fire minister Ferrand sidelined for reshuffle
    * Parliamentary graphic: http://tmsnrt.rs/2rWjPPp

 (Updates with resignation of government, Ferrand moved aside)
    By Richard Lough and Brian LovePARIS, June 19 (Reuters) - President Emmanuel Macron's
government on Monday promised to reshape France's political
landscape after winning a commanding parliamentary majority to
push through far-reaching pro-growth reforms.
    Macron's centrist Republic on the Move (LREM) party and its
centre-right Modem ally won 350 out of 577 lower house seats in
Sunday's election, which marked a record low turnout for a
parliamentary ballot in the postwar Fifth Republic.
    Government spokesman Christophe Castaner said the high
abstention rate - more than 50 percent of voters stayed at home
- was a failure for the governing class and highlighted the need
for a new politics.
    "The real victory wasn't last night, it will be in five
years' time when we have really changed things," Castaner told
RTL radio.
    He also said dissent would not be tolerated among the dozens
elected on the Macron party ticket, including many newcomers
such as 24-year-old law school graduate Typhanie Degois.
[nL8N1JF12P]
    "Being a member of parliament for Republic on the Move is a
commitment to Emmanuel Macron's presidential programme. It's
about loyalty," he said, adding that the previous Socialist
government was dogged by dissenters pursuing personal goals.
    Though lower than forecast by pollsters, Macron's majority
swept aside France's main traditional parties, humiliating the
Socialists and conservative The Republicans party that had
alternated in power for decades.

    FERRAND SIDELINED
    Prime Minister Edouard Philippe and his government resigned
later in the day amid preparations for a reshuffle on Wednesday.
Spokesman Castaner said he believed Philippe would remain as its
leader.
    One person who will definitely be out of the cabinet was
Richard Ferrand, the minister for territorial planning who has
been fighting accusations of financial impropriety since he took
office a few weeks ago.
    A source close to the president said Ferrand, who was an
early defector to Macron from the Socialist party and ran his
presidential campaign, would instead lead the LREM parliamentary
group.
    Investors welcomed Macron's win, with the gap between French
and German bond yields holding near its tightest level in seven
months. [nL8N1JG114]
    "After the reforms, which we expect Macron to implement,
France could turn into the strongest of all major economies in
Europe in the next decade, outclassing a Germany that is resting
on its laurels and a UK that (through Brexit) is impairing its
long-term growth prospects," said Holger Schmieding, chief
economist at German bank Berenberg.

    BUDGET CONSTRAINTS
    Macron wants to move quickly on relaxing labour regulations
before overhauling France's unwieldy pension system next year.
    During the presidential campaign he also promised to cut
corporate tax to 25 percent from 33 percent and make a 50
billion public investment in energy, vocational training and
transport infrastructure.
    But he will need to be mindful of a budget deficit that the
Bank of France forecasts will once again breach the EU cap of 3
percent of national income this year.
    "It is in France's interests, its political credibility, its
economic credibility, to conform with its obligations," Pierre
Moscovici, the EU's French commissioner for economic and
financial affairs told TV channel Public Senat.
    Sunday's high abstention rate means Macron will also have to
tread carefully with reforms in a country with muscular trade
unions and a history of street protests that have forced many a
government to dilute new legislation. [nL8N1JB651]
    But with his wins in last month's presidential election and
Sunday's parliament vote, he has routed the old political class.
    France's youngest leader since Napoleon and having never
before held elected office, Macron has seized on the growing
resentment towards a political elite perceived as out of touch,
and on public frustration at its failure to create jobs and spur
stronger growth.
    In winning the presidency in May, he filled a political
vacuum created by disarray within the Socialist Party and the
Republicans, with Sunday night capping a sequence of events that
looked improbable a year ago.
    The Republicans and their conservative allies will form the
largest opposition bloc in parliament with 131 seats, while the
far-right National Front won eight. The Socialist Party and
allies won just 44, their lowest in decades.
    "The collapse of the Socialist Party is beyond doubt. The
president of the Republic has all the powers," Jean-Christophe
Cambadelis said late on Sunday after announcing he would step
down as party chief.
    National Front leader Marine Le Pen promised her party would
remain a source of strong opposition alongside other bigger
parties, saying: "Don't write us off so fast."
    Sunday's election saw a record number of women - 223 versus
a previous high of 155 - voted into parliament, due largely to
Macron's decision to field a gender-balanced candidate list.
[nL8N1JD1J9]

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Decision Europe Eikon page    cpurl://apps.cp./cms/?navid=72745
Parliamentary election graphic     http://tmsnrt.rs/2rWjPPp
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 (Additional reporting by Caroline Pailliez, Helen Reid and
Ingrid Melander; Editing by Andrew Callus and Richard Balmforth)
 ((Email: richard.lough@thomsonreuters.com; Tel: +33 1 49 49 52
42; Reuters Messaging:
richard.lough.thomsonreuters.com@reuters.net))

Keywords: FRANCE ELECTION/ (UPDATE 3, TV, PIX, GRAPHIC)



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