France's leaders sink in polls amid calls for change of course

PARIS (Reuters) - French Prime Minister Manuel Valls saw his approval rating drop to a new low of 36 percent this month, while Francois Hollande remained the most unpopular president in more than half a century, an Ifop poll showed on Sunday. Valls was appointed to lead the government in a cabinet reshuffle in March, after the ruling Socialists suffered a bruising defeat in local elections. His economic policy, centered around payroll tax cuts for companies meant to improve their competitiveness and lift the country out of stagnation, has alienated many left-wing lawmakers. Valls saw his approval score sink by 9 percentage points so far in August after a 6-point fall in July and a 5-point dip in June, bringing the drop to 20 points in just three months, according to the Ifop poll published in Le Journal du Dimanche. Hollande, with an approval rating of 17 percent - down one point from last month - remains the most unpopular president in the history of France's Fifth Republic, which began in 1958. Unemployment hovers near a record high and France's economic recovery lags behind European peers. Valls' support level declined most sharply among centre-right voters, with a 15-point drop in one month, followed by Socialist voters and far-left voters, with losses of 11 and 9 points respectively. The poll results come days after Hollande said he would accelerate welfare and tax reforms to ease the strain on poorer households but would not back away from his business-oriented economic policy. Also on Sunday, Education Minister Benoit Hamon joined Economy Minister Arnaud Montebourg in criticizing the government's austerity measures and urging France to stand up against Germany's credo of fiscal discipline and instead choose policies supporting household consumption. "To ensure success to the supply-side policy carried out over the past two years, we need to revive demand. You can't sell anything to the French if they don't have enough income," Hamon was quoted as saying. "Mrs Merkel can no longer be the one setting Europe's course," he added. In an interview published on Saturday, Arnaud Montebourg said the austerity measures pursued by France and its European peers were strangling growth. Finance Minister Michel Sapin also argued for moderated deficit reduction, cautioning against the risk of "getting stuck in a spiral of weak or negative growth". The Socialist party begins its annual end-of-summer gathering on Thursday in the western port town of La Rochelle, where those opposing deficit-reduction measures will have a chance to air their gripes over economic policy. (Reporting by Natalie Huet; Editing by Stephen Powell)