Business leaders on Wednesday hailed promises by French President Francois Hollande to cut taxes and spending, but critics accused him of lurching to the right.
French president Francois Hollande gives a press conference to present his 2014 policy plans, on January 14, 2014 at the Elysee presidential palace in Paris
Hollande stonewalled on questions about his personal life at a high-profile press conference on Tuesday, batting aside queries about revelations of an affair with actress Julie Gayet.
A day later, the scandal rumbled on, with the government blocking Gayet from becoming a jury member for a prestigious French arts academy in Rome to avoid any further controversy.
But the focus also turned to Hollande's vow to revive France's beleaguered economy, laying out a "social democratic" vision at odds with election promises to boost spending and crack down on the rich.
Insisting that a return to economic growth was essential to France "retaining its influence", Hollande announced plans for 50 billion euros ($68 billion) in spending cuts between 2015 and 2017 and a 30-billion-euro reduction in corporate payroll charges.
"It was a move in the right direction. There is a growing awareness of the reality in France," the head of the MEDEF employers' union, Pierre Gattaz, told journalists.
In Germany, where there has been concern about the pace of reforms in France, Foreign Minister Frank-Walter Steinmeier hailed Hollande's move.
"What the French president presented yesterday is, firstly, courageous," Steinmeier said.
"That seems to me to be the right way, not only for France, but it can also be a contribution that brings Europe as a whole a bit stronger" out of the region's financial crisis, he said.
European Commission spokesman Olivier Bailly said it was also "very happy" to see steps "in the right direction" and that Hollande's plans are "in line with recommendations we made last year".
Hollande, whose popularity has plummeted to record lows, is under intense pressure to revitalise the French economy and reduce an unemployment rate that is at a 15-year high.
Citing Nordic countries as a model, he said his plans would allow France to boost growth while maintaining its much-cherished welfare state.
But far-left leader Jean-Luc Melenchon slammed Hollande's plans as "the most violent shift to the right" in decades.
"It's an enormous deception, we have never seen anything like it," Melenchon told RTL radio. "Hollande has adopted all the vocabulary of the right, the entire neo-liberal point of view."
Hollande also promised to reduce France's notorious red tape and appeared to be trying to repair his anti-business reputation, though he did say companies would be required to increase employment in exchange for liberalisation.
Prime Minister Jean-Marc Ayrault insisted reforms were needed and did not undermine the government's Socialist credentials.
"For me, the left -- whether it's called Socialist, social democratic or Communist -- does not always mean more debt and more deficit," Ayrault told the lower house National Assembly.
"I don't want France to be at the mercy of financial markets. The more we lower deficits, the less we will need to borrow and the more borrowing rates will be at an acceptable level," he said.
The centre-right UMP opposition was at pains to find fault with the plans, with former UMP finance minister Francois Baroin saying: "If this realisation is solid and serious, then objectively we can only support this process."
Economists expressed guarded optimism, with Christian Schulz of German bank Berenberg saying: "France's companies may be getting a much-needed boost.... 2014 could be a window of opportunity for Hollande."
Barclays analyst Fabrice Montagne welcomed "the restarting of economic reform" and agreed that "2014 will be a crucial year."
The marathon press conference saw Hollande put off the question of his tangled love life, telling reporters he would clarify the status of long-time girlfriend Valerie Trierweiler before a scheduled trip to the United States next month.
Hollande admitted that the couple were going through "painful moments" but said it was a personal matter that would be dealt with privately.
Trierweiler, 48, has been in hospital since Friday with stress linked to last week's revelation that Hollande, 59, has been having a secret liaison with 41-year-old Gayet.
The affair has raised questions about the official status of Trierweiler, who has an office at the Elysee presidential palace and a staff of five funded by the taxpayers.