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FILE PHOTO - French Prime Minister Manuel Valls (L) and Economy Minister Emmanuel Macron (R) leave the Elysee palace in Paris, France, following the weekly cabinet meeting, March 9, 2016 Picture taken March 9, 2016. REUTERS/Philippe Wojazer/File Photo(reuters_tickers)
By Richard Balmforth
PARIS (Reuters) - French president-elect Emmanuel Macron won an offer of support from Socialist ex-prime minister Manuel Valls on Tuesday as he and his aides worked on strategy ahead of parliamentary elections crucial to his reform plans.
The 39-year-old centrist's emphatic election victory over the anti-European Union Marine Le Pen of the National Front on Sunday brought relief to France's EU allies and financial markets.
But, once he has moved into the Elysee Palace next week, Macron faces the task of securing a second election victory in June for his start-up party, now renamed "La Republique en marche" or "Republic on the Move", in order to get the majority needed to implement his plans for economic recovery.
Successive centre-right and centre-left governments have failed to pull France out of deep economic malaise which includes slow growth, high unemployment of around 10 percent and dwindling competitiveness.
Macron's "En Marche" party currently has no seats in parliament, though an opinion poll last week predicted it would emerge as the largest in the parliamentary elections next month.
A majority would provide Macron with a decent chance of implementing a blueprint for lower state spending, higher investment and reform of the tax, labour and pensions systems.
Politicians from the traditional parties in France have taken on the air of survivors from a ship-wreck following Macron's triumph which in particular dealt a death blow to the Socialists. Their candidate, Benoit Hamon, secured only six per cent of the vote in the first round on April 23.
Party grandees in the conservative The Republicans party, whose candidate Francois Fillon also crashed out in the first round, were scheduled to meet on Tuesday evening.
Some leading centrist Republicans appear ready to override the party hierarchy and work closely with Macron - one of them being former conservative prime minister Alain Juppe.
In his power base in Bordeaux, Juppe told journalists: "I am not envisaging systematic obstruction and head-on opposition (to Macron). We have to help France succeed and help vital reforms succeed."
But a strong element in The Republicans has a different strategy, hoping to win a majority in the June elections and be able to name a conservative prime minister with whom Macron would have to share power in a so-called "cohabitation".
On past form in French politics, this leaves an incumbent president unable to exert control over economic policy.
Tuesday's offer by Valls to stand for "En Marche" in the two-stage legislative elections in June is the first high-profile defection since Macron's election win and could be a boost for him.
As a pro-business prime minister under outgoing President Francois Hollande, Valls is a kindred spirit of Macron who worked in his government as economy minister.
But Macron will be cautious about inviting too many prominent former Socialists into his movement as that would lend ammunition to conservative opponents portraying his administration as a continuation of Hollande's unpopular rule.
TRADE UNION WARNING
Valls' overture received a non-committal response from Macron's party. Party spokesman Benjamin Griveaux said Valls had not applied to the party's selection committee and had 24 hours left to do so.
Whether Valls's offer has been accepted will be known on Thursday when the names of Macron's 577 candidates in the legislative elections will be announced.
Signs that the economic outlook is not as bleak as it has been may provide a breathing space for Macron and his team.
A Bank of France report on Tuesday estimated second quarter growth at 0.5 percent and flagged signs of a pick up in industrial production, though prospects for the service sector dipped.
A modest turn-out of a few hundred at a Paris demonstration by the militant CGT trade union on Monday underscored that French workers are more reluctant than they used to be to take to the streets to aggressively press labour claims.
But the CFDT, France's biggest trade union, repeated a warning to Macron that he would have to agree to work with them as social partners.
The special conditions of Macron's election "oblige you to take into account those who voted for you, not because they backed your programme, but because they rejected the National Front," CFDT chief Laurent Berger wrote in an open letter published by Le Monde newspaper.
Medef, the large employers' group, made clear it was placing great hopes in Macron's reforms to lift the burden on employers to revive companies and encourage foreign investors.
"That means freeing the creative energies of wealth and jobs by simplifying labour legislation, reducing charges and reforming taxes," Medef President Pierre Gattaz said in a message of congratulations to Macron on Sunday.
Valls, making his offer to join Macron's movement on RTL radio on Tuesday, declared France's Socialist Party was dead.
"It is behind us ... The essential thing today is to give a broad and coherent majority ... to Emmanuel Macron to allow him to govern," he said.
EU commissioner Pierre Moscovici, who was finance minister under Hollande from 2012 to 2014, said he planned to remain a Socialist and urged the party not to stake out a position in opposition to Macron.
"There's no sense for a Socialist to work against Emmanuel Macron. He's pro-European, he has progressive ideas and he hasn't unveiled all of his plans nor named his government," Moscovici told journalists.
(Reporting by Marine Pennetier, Emmanuel Jarry, Michel Rose and Adrian Croft in Paris and Claude Canellas in Bordeaux; Editing by Tom Heneghan)