French Government Resigns
The statement said a new government would be formed on Tuesday in line with the "direction he (the president) has defined for our country."
The move comes a day after leftist Economy Minister Arnaud Montebourg called for new economic policies and questioned what he called Germany's "obsession" with budgetary rigor.
"France is the euro zone's second-biggest economy, the world's fifth-greatest power, and it does not intend to align itself, ladies and gentlemen, with the excessive obsessions of Germany's conservatives," Montebourg said on Sunday.
Valls, a centrist within the socialist party, replaced Jean-Marc Ayrault as prime minister in March. He was appointed by French president Francois Hollande to lead a cabinet reshuffle after serving as interior secretary.
(Reporting By John Irish; editing by Mark John)