PARIS (Reuters) - French leftist Arnaud Montebourg, who as industry ministry has long accused the European Union of hurting economic growth with demands for lower public deficits, won new powers as economy minister in a cabinet reshuffle announced Wednesday.
His promotion will raise new concerns in EU capitals about France's resolve to stick to deficit targets, just two days after President Francois Hollande hinted that Paris would seek further time from Brussels to get its public finances in shape.
Montebourg will work alongside Michel Sapin, the former labour minister who was named to replace Pierre Moscovici as finance minister in a new government unveiled three days after ruling Socialists were trounced in local elections.
Sapin will formally have oversight over France's public finances - which last year showed a deficit at 4.3 percent of output, well above an EU target of three percent.
However Montebourg's expanded role, which will include oversight on industry and the digital economy, will give him a bigger say on policy than he had before.
The appointments, which were announced in a presidential statement read out on the steps of Hollande's Elysee Palace, came after centrist Manuel Valls was appointed France's new prime minister on Tuesday, replacing Jean-Marc Ayrault.
Hollande's ex-partner Segolene Royal, an outspoken Socialist who ran for president herself in 2007, returned to the front-line of French politics as energy and environment minister.
Hollande's Greens coalition partners refused to take part in Valls' government in protest at his socially conservative stances on issues such as immigration, a move which could weaken support for economic reforms in parliament.
(Reporting By Elizabeth Pineau; Writing by Nicholas Vinocur; editing by Mark John)