Borloo was himself moved as a replacement for the former prime minister Alain Juppe, who was forced to resign from the new government after failing to win a seat in parliament on Sunday.

Controversial promotion

"You can't refuse an offer like that," Borloo was quoted as saying by the daily Le Parisien ahead of the announcement.

"The president of the republic knows what a position as number two in the government means, because that's what he was himself. For me, it's a promotion," he said.

Such a promotion however may spark some resemtment within the party ranks of the UMP, as many members blame the former labour minister for the poorer than expected showing in Sunday’s vote.

Early polls had shown the UMP and its allies on course for a landslide majority, giving Sarkozy a striong platform to push through a series of economic and social reforms pledged during his presidential campaign in May.

However, the opposition Socialists, who had been in a state of disarray following their third consecutive presidential defeat rallied to make siginificant gains and many in the right blame Borloo for his unguarded comments about a possible increase in VAT.

The UMP and its allies won a commanding majority of 345 seats in the 577-seat national assembly but the result fell well short of forecasts which went as high as 470 seats.

More women

"This reshuffle is a bit of a paradox," the conservative daily Le Figaro wrote of Borloo's switch ahead of the official announcement. "The finance minister is half-promoted, half-repudiated."

Royal and the Socialists did
better than they had feared [AFP]
The Socialists breathed a sigh of relief at avoiding a drubbing and winning 207 seats with their allies.


The promotion of Lagarde to finance minister and running the Euro-zone’s second largest economy reinforces Sarkozy’s pledge to have a rough parity between male and female ministers.

Lagarde, who handled the tricky world trade talks dossier and defended subsidies for French farmers in the previous government, was the first woman on the executive committee of international law firm Baker & McKenzie and went on to head it.

There are now a record number of female parliamentarians in France following the elections on Sunday with 18.5 percent of seats now held by women.

France consequently lifts its country ranking in terms of women's representation in parliament from an embarrassing 86th to 58th spot, in between Venezuela and  Nicaragua.

Coming after Segolene Royal's failed bid to become France's  first woman president, the result - which ushers in 61 women  lawmakers on the left and 46 on the right  - was greeted as a step in the right direction.

Less minorities

But Le Monde newspaper said lifting France just above the European average of 17.7 percent of female representation was in itself "nothing to be proud of."

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For more on Laporte's appointment, visit our sports site here

Efforts to improve the ethnic diversity of parliament, a key issue since the riots in 2005 in France's immigrant-heavy suburbs, were also largely frustrated.

Sarkozy appeared to indicate progress last month by appointing Rachida Dati, a French-born magistrate of north African parents, as justice minister.

But despite a record number of black and Arab candidates vying for seats, Sarkozy's UMP fielded 12, the Socialists 20, and smaller parties several dozen, only one seat on the mainland went to a candidate from an ethnic minority.

Meanwhile, in a surprise appointment on Monday, Sarkozy appointed Bernard Laporte, currently the national Rugby Union coach, as sports minister. Laporte will assume his duties after the World Cup later this year, to be held in France.