Sarkozy says euro's demise would be end of Europe

By @ibtimes on

French President Nicolas Sarkozy said on Friday he would fight to shield the euro as the currency's members struggle with a debt crisis and vowed to fulfill France's commitments to improve its own finances.

In a traditional televised address to mark the new year, Sarkozy flatly ruled out any possibility of France dropping the euro, which he warned would have dire consequences for all of Europe.

Don't believe, dear compatriots, those who suggest that we should leave the euro... The end of the euro would be the end of Europe, Sarkozy said.

I will fight with all my strength against this step backwards that would undo 60 years of European construction which brought peace and fraternity to the continent, he added.

Sarkozy also said he would not let France follow other European countries that suffered debt crises this year, and promised to stick to plans for returning state finances to health.

The countries that lived above their means without thinking about tomorrow paid a heavy price. My primary duty is to protect France from this prospect, Sarkozy said.

TOUGH YEAR

France's public deficit is set to hit 7.7 percent of gross domestic product (GDP) in 2010, and the government aims to cut the gap to 6 percent by the end of 2011 as a first phase of a plan to trim it to a European Union limit of 3 percent in 2013.

According to the government, France's public debt will reach a peak of 87.4 percent of GDP in 2012 before it starts falling in 2013 when it is expected to ease to 86.8 percent.

France will keep...its commitments in balancing its finances. I will not compromise on this objective, Sarkozy said.

The president, who is struggling with dismal approval ratings, said he would push ahead with his reform agenda in 2011 despite looming presidential elections in 2012.

Sarkozy weathered a tough political year in 2010, enduring months of protests over his unpopular reform of the pensions system at home and battling wider anxiety abroad over the health of euro zone economies along with other European leaders.

As protests swept across France, the conservative president stayed out of the limelight and pushed his ministers to the fore before unveiling a cabinet reshuffle that filled the government ranks with loyalists of the ruling UMP party.

In the address, Sarkozy defended the unpopular pension reform, which raised the minimum pensionable age by two years to 62.

Our retirement system was sheltered from inevitable bankruptcy that eyed it if we didn't do anything, he said.

(Reporting by Leigh Thomas; editing by Ralph Boulton)

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