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Sarkozy stands by as France's socialists suffer

France's former conservative president, Nicolas Sarkozy, is likely to announce his return to politics as early as this week following the very narrow victory for the struggling socialist government in a confidence vote, political analysts predict.

Sarkozy now stands a decent chance in the 2017 presidential election, as the current French government's popularity has reached record lows. However analysts have warned that corruption probes surrounding Sarkozy could stymie his chances.

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Nicolas Sarkozy
Thomas Samson | AFP | Getty Images

In a crucial confidence vote in parliament on Tuesday evening, French Prime Minister Manuel Valls scraped through after deputies in the National Assembly voted 269 to 244 in favor of the government's policies.

Valls urged parliament to embrace more business-friendly reforms, asking why France should be the only large country that doesn't help businesses.

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He has proposed a 50 billion euro ($64.8 billion) cut in public spending that will fund 40 billion in tax breaks for companies, with the unveiling of the government's full 2015 budget set for October 1.

Incoming European economic and financial commissioner and former French finance minister Pierre Moscovici said it was a "necessity" the pro-reform agenda found confidence.

French government survives socialist MP revolt

"It is up to this government to work at cutting public expenses because that is a necessity - to work on helping the businesses to invest because it's the only way to create growth and jobs. And to enforce structural reforms that are needed for the French economy, that is a tough job," he told CNBC.

The government's attempted shift to more pro-business policies follows the decision to oust leftwing economy minister Arnaud Montebourg, replacing him with former Rothschild banker Emmanuel Macron.

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Hollande's most recent poll approval ratings have fallen to 13 percent – with 62 percent of electors hoping to see Hollande quit before his term ends in 2017.

"I think obviously he (Sarkozy) will stand a chance, because now the government and the president, are so low in the popularity ratings, there are so many people that are dissatisfied with them that everybody from the right has a chance for 2017," said Bruno Jeanbart, director of political studies and opinion polls at Opinionway.

French budget will be difficult to pass: Pro

"But he is only one of them, and so the battle will be inside his own camp. The most difficult for him will be the political affairs," he told CNBC.

Socialist MP Christian Paul was among 30 other socialist MPs that abstained from the vote. He said there was "nothing new" in the prime minister's speech and it was necessary to oppose policies that will not succeed.

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"If we want neither Nicolas Sarkozy or the National Front in 2017, we must roll up our sleeves, we need all the left, including members who abstained today who are serious people with realistic proposals, " he told CNBC.

Paul added that, in particular, a contingency plan against recession was essential as were more "targeted" investments in businesses

By CNBC's Jenny Cosgrave: Follow her on Twitter @jenny_cosgrave