French President Francois Hollande approved a new government yesterday that includes 2007 presidential hopeful Segolene Royal as minister of environment and energy.

Incoming ministers were named after discussions between new Prime Minister Manuel Valls and President Hollande.

The changes follow a crushing defeat for Mr Hollande’s Socialist Party in municipal elections last week.

Ms Royal’s return to government follows a long period in the political wilderness.

She ran an unsuccessful campaign for the presidency in 2007, losing to Nicolas Sarkozy.

Laurent Fabius and Jean-Yves le Drian keep their jobs as foreign affairs and defence ministers in the new government.

Former finance minister Pierre Moscovici has left the government and the brief has been split. Michel Sapin will take charge of finance and Arnaud Montebourg will be in charge of industry and economy.

However, Mr Valls suffered his first setback as the socialists’ allies, the green EELV party, jumped ship.
EELV announced late on Tuesday that “EELV refuses to participate in a Valls government,” despite the fact that the new PM offered to create an enlarged ministry overseeing the ecology, energy and transport that they could head up.

President Francois Hollande nominated the right-of-centre interior minister Mr Valls to the post on Monday.

He replaced Jean-Marc Ayrault who had headed up a deeply unpopular government which struggled to create sorely-needed jobs and boost a battered economy.

But Mr Valls faces an uphill struggle as prime minister, not only having to bring down the country’s jobless ranks which reached a record 3.34 million in February, but to iron out opposition to his appointment from within the Socialist Party.

He is popular with voters across the political spectrum but his style and politics, which have been compared to those of former British premier Tony Blair, have alienated left-leaning members of the party.

President Hollande has tasked Mr Valls with implementing a package of pro-business policies known as the Responsibility Pact, which cut taxes on firms. It is to be financed by spending cuts of €50 billion (£41.5bn).