DHAKA: French PM Manuel Valls has submitted the government’s resignation to president Francois Hollande and has been asked to form a new cabinet.

The government was badly shaken on Sunday by criticism over its handling of the economy by economy minister Arnaud Montebourg.

Moments after Valls’s resignation Hollande issued a statement, reports the BBC.

He asked Valls to set up a new cabinet ‘consistent with the direction (Mr Hollande) has set for the country’.

The prime minister had accused Montebourg of ‘crossing a yellow line’ after the economy minister had attacked austerity measures which he said were strangling France’s growth.

Montebourg told a meeting of Socialists in eastern France that the time had come to put up a ‘just and sane resistance’ to the ‘excessive obsessions of Germany’s conservatives’.

BDST: 1658 HRS, AUG 25, 2014