French election rivals clash on euro

Reuters News
Posted: Apr 20, 2012 5:48 AM
French election rivals clash on euro

By Alexandria Sage

PARIS (Reuters) - France's presidential rivals clashed over the euro crisis in final exchanges before Sunday's first round of an election in which most polls show Socialist Francois Hollande pulling further ahead of unpopular conservative Nicolas Sarkozy.

In separate radio interviews on Friday, President Sarkozy said he had helped steer the euro zone through the worst of its debt crisis, making him the safest pair of hands, while the challenger Hollande blamed his adversary for mismanaging France's strained public finances.

The risk premium investors charge for holding French 10-year bonds rather than safe haven German Bunds rose above 1.50 percentage points on in a possible foretaste of market jitters about a left-wing government in Paris.

"The risk of the euro imploding doesn't exist anymore," Sarkozy told RTL radio, as the last opinion polls before campaigning for the first round ends at midnight on Friday showed him sinking further behind Hollande.

"Europe is convalescent. That's a reality. We can't afford any mistakes. The minute we ease up on cutting spending, reducing the deficit, reducing the debt, France will share the fate of Spain," Sarkozy said, contrasting his time dealing with the crisis with Hollande's relative lack of experience.

"For 10 years he was head of the Socialist party. He wasn't the head of very much. That's the truth," he said.

Spain's economy is weighed down by debt and its government is struggling to convince lenders it can remain solvent.

Sarkozy, who is being punished for economic gloom, high unemployment and an impulsive presidential style that grates on many voters, could lose by between 7 and 14 points in a May 6 runoff against Hollande, according to the latest polls.

Hollande told Europe 1 radio that France's budget woes were the result of five years of Sarkozy's policies, and called for European action to revive growth to fight the debt crisis.

"The important thing is to put our public finances in order. They've been turned completely upside down these past years due to irresponsible fiscal policy and the crisis," Hollande said.

He called for the European Central Bank to take a radically different role by lending directly to troubled euro zone states rather than to banks, and by keeping interest rates low. But he acknowledged Germany was dead against expanding the ECB's role.

Financial markets worry that Hollande's focus on higher taxes rather than public spending cuts, and his intention to raise taxation on the financial sector, could lead to higher French bond yields and spur volatility in stock markets.


Firebrand leftist Jean-Luc Melenchon, the surprise of the campaign who has soared from obscurity to vie for third place with around 14 percent in first-round polls, vowed to exert strong influence from outside on any Hollande-led government.

Addressing a final rally in Paris which organizers said attracted 60,000, he declared: "I appeal to you, left-wing comrades who are listening and hesitating, come and help us not just overtake the extreme-right but raise the demands of the left."

The rally ended with a clench-fisted Melenchon joining hands with leaders of the Communist Party and his Left Front and vowing to remain united as they sang the Internationale, the anthem of socialist movements worldwide.

A swathe of final polls published on Friday mostly showed Sarkozy's support eroding while Hollande's backing held steady.

An Ipsos survey showed Sarkozy down 1.5 points on 25.5 percent in the first round, with Hollande on 29. A Harris Interactive poll put Sarkozy at 26.5 percent to Hollande's 27.5.

All showed the Socialist far ahead of the incumbent in voting intentions for the decisive second-round runoff, with a lead of between 7 and 14 percentage points.

The two mainstream candidates are well ahead of far-right leader Marine Le Pen, with 14-16 percent, Melenchon around 14 and centrist Francois Bayrou, about 10 percent. Five other fringe candidates trail further behind.

Sarkozy and Hollande are set to resume their duel on Monday with a series of campaign rallies. Their only face-to-face television debate is set for May 2.

Only one pollster, TNS, put the rivals neck-and-neck on 27 percent in its final first-round poll on Friday.

Sarkozy has hammered on immigration, security and trade protectionism to try to win back voters from Le Pen while at the same time starting to court the centrists he will need from next week to have any hope of catching up with Hollande by May 6.

The Socialist's calls to renegotiate a European budget discipline pact to add pro-growth clauses has rattled investors as market fears have resurfaced over the debt crisis, focusing chiefly on Spain.

Sarkozy raised hackles himself among euro zone partners this week by pressing for the ECB to take a more active role in encouraging growth by letting the currency depreciate, although both he and Hollande deny they want to alter its single mandate of ensuring price stability.

(Editing by Catherine Bremer, Paul Taylor and Alastair Macdonald)