France's future hangs in balance in 2012: Sarkozy

31st December 2011, Comments 0 comments

French President Nicolas Sarkozy warned on Saturday that the country's future hung in the balance in 2012 amid the eurozone debt crisis but said ratings agencies would not decide French policy.

"France's destiny could once again be tipped" in 2012, Sarkozy said in a televised New Year's address. "Emerging from the crisis, building a new model for growth, giving birth to a new Europe -- these are some of the challenges that await us."

"This crisis... probably the most serious since World War II, this crisis is not over," Sarkozy said.

"Yet there are reasons for hope... We must, we can keep confidence in the future," he said.

The speech was Sarkozy's last New Year's address before France heads to the polls for the first round of a presidential election in April.

"What is happening in the world announces that 2012 will be a year full of risks but also full of possibilities. Full of hope, if we know how to face the challenges. Full of dangers, if we stand still," Sarkozy said.

Touching on fears that France could lose its cherished triple-A credit rating, Sarkozy said: "I do not underestimate the consequences that the ratings agencies and runaway markets can have on our economy... but I say this for everyone to hear -- neither the markets nor the agencies will decide French policies."

Sarkozy also excluded that France would impose a new austerity package on government finances, following the announcement of two deficit-cutting programmes since August.

Keen to maintain its triple-A rating, the French government in November announced 65 billion euros ($84 billion) in savings by 2016, on top of a 12-billion-euro deficit-cutting package announced in August.

The government has said it needs to make 100 billion euros in savings to balance the budget by 2016.

Sarkozy is facing a tough battle for re-election against Socialist frontrunner Francois Hollande, with the economy expected to take centre stage.

Opinion polls have consistently shown Hollande leading over Sarkozy in the race.

France will vote in the first round of the presidential election in April and potentially a second round in May, followed by parliamentary elections in June.

© 2011 AFP

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