France's Hollande to give moderates key cabinet jobs

PARIS (Reuters) - French President Francois Hollande is to unveil his government on Wednesday, likely to opt for moderate social democrats in the key posts of finance and foreign affairs and put a more old school Socialist in charge of a new super ministry for youth and education.

The cabinet, due to be announced in early afternoon, is expected to respect gender parity and reflect Hollande's pledge to make schools and youth employment a central priority of his administration.

Hollande, who flew to Germany to meet Chancellor Angela Merkel hours after being sworn in, chose senior civil service Pierre-Rene Lemas as his chief of staff and Germanophile Jean-Marc Ayrault as prime minister in a nod to good relations with Berlin.

Doubts still hung over the new president's choices for top posts as senior Socialists and younger figures who emerged in the campaign jockeyed for leadership of key ministries such as finance, the interior and foreign affairs.

With anxiety high over Europe's debt crisis, Hollande is seen picking longtime friend and campaign adviser Michel Sapin as finance minister, tasked with shrinking France's budget deficit and reversing a spiraling unemployment rate.

Sapin, a moderate like Hollande himself, wants to move away from blanket austerity which he says risk plunging the euro zone into a deep recession, and introduce measures to stimulate growth.

There is less clarity on who will take over foreign affairs from outgoing minister Alain Juppe, with many betting that one-time European affairs minister Pierre Moscovici, 54, will be rewarded for managing Hollande's election campaign.

A graduate of the elite ENA school for civil servants, Moscovici has good command of English and enough clout to represent France on the world stage.

But he was a late convert to the Hollande camp, having long been a disciple of party heavyweight and former IMF chief Dominique Strauss-Kahn, and lacks the president's personability.

Another possibility is Laurent Fabius, who was prime minister at just 37 in 1984 under former Socialist President Francois Mitterrand and served as finance minister for ex-Prime Minister Lionel Jospin in 2000-02.

Fabius has strikes against him, having been dismissive of Hollande in the past and clashed with him in 2005 when he campaigned for a "no" vote in a referendum over a European Constitutional treaty that Hollande supported.

Asked whether he would be waiting anxiously by his phone to hear the news, Fabius answered with a dead-pan "No".

Martine Aubry, an old-school Socialist who lost a party primary to Hollande, may head an expanded Youth and Education Ministry, while Manuel Valls, a young law-and-order Socialist, is seen as a likely choice for Interior Minister.

CRITIC OF GLOBALISATION

As France struggles to contain a decline of its manufacturing base, a leading candidate for industry minister is Alain Rousset, a strong advocate of decentralization in charge of the Lorraine region, who wants to emulate the success of Germany's federal states in promoting investment in technology.

Another candidate is the debonair 49-year-old Arnaud Montebourg, a left-wing critic of globalization, who threw his backing behind Hollande in the party primaries.

A top choice for defense minister, overseeing plans to withdraw French troops from Afghanistan by end-2012, is longtime Hollande friend Jean-Yves Le Drian. But Fabius could be given the portfolio if passed up for foreign affairs.

In keeping with his concern for gender parity, Hollande is seen choosing Aurelie Filipetti, a 38-year-old up-and-comer in the Socialist Party, for culture minister, while spokeswoman Najat Vallaud-Belkacem, 34, is likely to get a junior post fighting discrimination.

The cabinet line-up to be named on Wednesday could yet be changed after parliamentary elections next month depending on how well the left fares and whether it needs to bring in coalition partners.

(Reporting By Nicholas Vinocur; Editing by Paul Taylor)

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