President Francois Hollande has named Interior Minister Manuel Valls as France’s next prime minister.
Mr Hollande, whose popularity has slumped, said Mr Valls would head a “fighting government”.
The ruling Socialists have been badly bruised in local elections which saw big gains for conservatives and the far-right National Front (FN).
Mr Valls, 51, has replaced PM Jean-Marc Ayrault, whose office confirmed his resignation on Monday.
speaking at a gathering, President Hollande said France had to put right its public finances, acknowledging it was time for change.
He proposed a reduction in taxes and worker contributions to spur job creation. “We are in this for the long haul,” he said.