Francis Mer is seen as someone who will promote radical reform

Mr Mer is credited by many as the saviour of the French steel industry, having overseen the privatisation of Usinor and later moulded it into Arcelor, now the world's largest steel enterprise.

Analysts say his appointment is an indication of the reforming policies the new administration aims to follow, ahead of the election of a new National Assembly next month.

Facing the unions

Francis Mer is seen as a man who will promote radical reform within the finance ministry - an institution with a reputation for resisting change.

"The finance ministry is very top-heavy and many people consider it is not close enough to the people," Jacques Reland, an expert on French affairs at London's Guildhall university, told the BBC's World Business Report.

The big challenge at the ministry is to face the unions, according to Mr Reland.

"[Mr Mer] is good at establishing social dialogue and maybe will be more successful than his predecessors," he said.

Mr Mer does have experience in this field. Whilst head of Usinor he cut the workforce by two thirds, working closely with the unions to soften the blow.

Pro-European integration

The new appointment at the finance ministry is being seen as an indication of the policies of Prime Minister Jean-Pierre Raffarin.

"He is sending a strong warning shot to civil service unions who have been seen by many people as the main obstacles in the way of modernisation and reform of the French state," Mr Reland said.

Mr Mer is also a strong supporter of European integration.

He is head of the International Iron and Steel Institute, chairman of steel lobbying group Eurofer, and recently advised EU trade commissioner Pascal Lamy during talks in the US on steel tariffs.