The criticism, which was both pointed and indirect, seemed to increase pressure on Mr. Hollande to reorganize his cabinet soon, though it has been in power only a year. Mr. Fabius, a former finance minister himself, referred to divisions within the vast ministry, known as Bercy for its location.

“I ran Bercy in the past, and it’s true it needs a boss,” Mr. Fabius told RTL radio. “At the moment you have several bosses. Whatever the quality of the men and women and their level of agreement, I think that stronger coordination would be more useful.”

Asked if he expected changes soon, Mr. Fabius said that if there were changes to the cabinet, “this question will be dealt with.”

His comments on Tuesday took some of the glow off Mr. Hollande’s legislative success.

The upper house of Parliament easily passed a version of the labor bill already passed by the lower one. It is the culmination of months of painstaking negotiations among the government, employers and trade unions that ended in January. The law also signifies a success in Mr. Hollande’s strategy of avoiding strikes through dialogue and compromise among what he calls social partners.

The law makes it easier for companies to lay off workers or to reduce pay and working hours in economic downturns. But it also increases benefits for workers on short-term contracts, which have been popular as a way for companies to avoid hiring full-time employees, and which represent up to 80 percent of all new job contracts in France.

“This is one of those moments in which a great step forward has been made,” said the labor minister, Michel Sapin, who led the negotiations and is close to Mr. Hollande. The main opposition center-right Union for a Popular Movement abstained in the vote, and the Communists voted against the legislation.

The law’s passage prompted some rare praise for the government from the business world. Laurence Parisot, president of the Medef employers’ association, hailed it in a statement as “an event in the economic and social history of our country.”

The “flexicurity” law gives companies more freedom to hire and fire, as well as the right to demand that workers take pay cuts and work shorter hours in a crisis in exchange for job security. About 3.5 million mostly lower-wage workers will gain additional employer-paid health benefits, and businesses will have tax incentives to hire under long-term contracts. Measures also encourage worker mobility.

While two of France’s more militant labor unions opposed the accord, the more mainstream ones signed on. There is wide agreement that the country has to bring down its relatively high labor costs if it is to compete with lower-wage destinations overseas and even with Germany, which underwent its own painful labor-market restructuring over the last decade and currently has a jobless rate of just 5.4 percent.

It is the kind of structural overhaul that European Union leaders are urging to increase employment and growth in France, which is being given two more years to get its budget deficit down to the European Union-mandated 3 percent of the gross domestic product. But even the government acknowledges that more must be done, including further changes to pensions.

France is in the midst of an unemployment crisis, with nearly 11 percent of the work force unemployed in a period of near recession. Among people under 24, the problem is even worse, with more than 26 percent jobless.

Already under pressure from the European Union to address France’s high public-sector spending, Mr. Hollande has seen his approval rating sink to historic lows in opinion polls. He is scheduled to hold a news conference on Thursday.

But on Tuesday, no government official would respond to Mr. Fabius’s comments. The government spokeswoman, Najat Vallaud-Belkacem, was described by her office as “too busy to comment.” Requests for comment from Mr. Hollande’s office were not returned.

Mr. Moscovici, the finance minister, is considered a moderate and pragmatist on the center-right of the Socialist Party. He has struggled with his junior ministers. Jérôme Cahuzac, the budget minister, resigned in disgrace after lying repeatedly about an undeclared foreign bank account, prompting much criticism of Mr. Moscovici. Arnaud Montebourg, the junior minister for industrial renewal, comes from the left of the party and ran for president himself on a platform of “deglobalization.”

Mr. Hollande’s efforts to pacify all wings of the Socialist Party have thus created constant tensions within Bercy, with Mr. Montebourg calling for protectionist policies, while Mr. Moscovici is trying to convince the world that France is open to investment and competition. This month Mr. Montebourg blocked Yahoo from buying a 75 percent stake in the French video Web site Dailymotion, owned by French Telecom, in which the state has a minority stake.

Mr. Moscovici criticized the move, as he criticized Mr. Montebourg’s angry and public dispute with an American businessman over French working habits at a threatened tire factory.

Mr. Fabius, who in 1984, at age 37, became the youngest prime minister in modern French history, was also finance minister from 2000 to 2002.

Article source: http://www.nytimes.com/2013/05/15/world/europe/french-lawmakers-loosen-labor-rules.html?partner=rss&emc=rss