President Jacques Chirac appointed Dominique de Villepin, a loyalist who was France's voice against the Iraq war, as prime minister Tuesday to head a new government in response to a humiliating referendum defeat.
Villepin, 51, moves from the Interior Ministry to replace Jean-Pierre Raffarin, dumped after voters on Sunday roundly rejected Chirac's call for the ratification of a European Union constitution.
Chirac charged Villepin with the task of forming a new government. Villepin arrived at the presidential Elysee Palace just minutes after Chirac bid farewell to Raffarin with a handshake on the palace steps.
Nicolas Sarkozy, who heads Chirac's governing center-right party, is being brought back into government to head the Interior Ministry that Villepin vacates, lawmaker Yves Jego, who is close to Sarkozy, told France-Info radio. There was no immediate confirmation from Chirac's office of the reported appointment for Sarkozy.
The silver-haired Villepin takes over at a difficult time: Unemployment is running at 10 percent and the French political establishment is reeling from Sunday's referendum that marked a stinging humiliation for Chirac.
But Villepin has never held elected office - which makes him an unpopular choice for some.
"It's a catastrophe, a real catastrophe," said Philippe Moreau Defarges, a researcher at the French Institute for International Relations.
"People will come out on the streets to show their anger. It's a man who has never been elected, who doesn't represent the people at all. This will turn out badly. The crisis is not over yet."
But for Chirac, Villepin was a known quantity: The senator's son was his closest adviser from 1995 to 2002. Villepin is expected to work closely with Chirac, unlike Sarkozy, whose name had also been tossed around as a potential replacement for Raffarin. Sarkozy makes no secret of his presidential ambitions and has had an at times open rivalry with Chirac.
Chirac may be hoping that the prime minister's office will give Villepin a prominent platform to become his eventual successor, perhaps at the next elections in 2007, undercutting Sarkozy's ambitions.
Villepin "has been a close adviser, whom the president particularly listens to," said Nicolas Fauger, a political researcher at Sciences Po university. "The government won't be confrontational with the presidency."
Chirac's "bet is being able to transform Villepin into a credible presidential candidate, either for the next election or the one after that."
He added: "Villepin is not particularly popular. He's credible but not at the same level as Sarkozy."
Raffarin, in a short address after the president accepted his resignation, said Villepin's government would work to bring a significant drop in unemployment in the last two years of Chirac's second term - which could be his last.
"I confirm this commitment, even if the drop in the dollar and the rise in oil prices delay it for a few months," he said.
Raffarin defended his three-year record as prime minister, saying he acted to protect the future of the pension system and state health care, among other programs.
"I have always been aware that what is healthy for the nation does not go unblamed by public opinion," said Raffarin. Polls showed that he was one of the most unpopular prime ministers of the Fifth Republic founded in 1958.
JOHN LEICESTER, Associated Press Writer