It is Swiss, not French. The best MFE in Switzerland comes from ETH (Einstein was there) and is extremely popular.
In France, there is the Master in Quantitative Economics and Finance offered by Ecole Polytechnique and HEC Paris; even if they have a course on asset pricing in the derivative market, it is more a master in Finance than an MFE.
What the government intent to do is good (reuniting grandes ecoles and universities). And asking private institutions to invest in those universities is definitely a good thing : that means more professors, better infrastructures and better reputation.