REUTERS

PARIS SOCIALIST presidential frontrunner Francois Hollande accused Nicolas Sarkozy on Thursday of encouraging market speculation for electoral gain, after the president said victory for Hollande could spur a crisis of confidence in France.

The exchange came as another opinion poll by the LH2 agency showed Hollande winning the coming duel with Sarkozy.

With tensions between the two rivals mounting 10 days before the first presidential election round on April 22, Sarkozy has warned that markets could take flight from French securities if Hollande wins power in a May 6 runoff.

“The people do not want to have some kind of diktat imposed on them from outside, so when Nicolas Sarkozy tries to call the markets to come to his rescue, that is not in the country’s interest,” Hollande said on France 2 television.

“What is in France’s interest is fighting speculation, not encouraging it under the pretext of helping him in the presidential election.” Sarkozy - whose main asset in a close-fought duel against the popular but inexperienced Hollande is his record of managing Europe’s debt crisis - has increasingly played on fears that France under a left-wing government committed to raising spending could lose investor confidence.

Unveiling his manifesto last week, he said Hollande would lead France towards the fate of Greece or Spain.

Hollande is running on a taxand- spend programme which he says would bring France to a balanced budget a year later than Sarkozy’s manifesto.

Economists say Hollande’s spending plans would need to be scaled back to keep France’s efforts to reduce its deficit on track.

The targets are seen as crucial to Paris retaining investor faith at a time when the euro zone debt crisis refuses to abate.

“If we start hiring civil servants, if we will start spending again, if we throw the pension reform into question, it’s not a risk that interest rates will rise, it’s a certainty,” Sarkozy said on Wednesday.

“It would immediately set off a crisis of confidence.” In a research note, UBS Global Asset Management analysts highlighted the weakness in France’s public finances, saying the country no longer deserved to be considered part of the euro zone’s core countries, a category that includes Germany.