Sarkozy: Europe faces ‘unprecedented crisis’

French President Nicolas Sarkozy warned Monday that Europe faces an "unprecedented crisis" but urged calm in the face of Standard & Poor's multiple eurozone credit rating downgrades.

Published: 16 January 2012 17:59 CET

Sarkozy issued the warning in Madrid where he was the first foreign leader to meet with Spain’s new conservative prime minister, Mariano Rajoy, since his swearing-in December 21.

“We are confronted by an unprecedented crisis that forces us to cut spending, lower our deficits but also to find the path to new growth by resolving our competitiveness problems,” Sarkozy said.

Standard & Poor’s cut the credit rating of nine debt-laden European countries Friday, including stripping France of its top-notch AAA rating and slashing Spain’s rating by two notches.

Moody’s Investors Service soothed some of the pain Monday, confirming France’s AAA rating while continuing to review whether it will maintain its “stable” outlook.

“Fundamentally it changes nothing,” said Sarkozy, who is facing an uphill battle for re-election in April.

“We have to reduce our deficits, cut spending, improve our countries’ competitiveness to rediscover growth,” he said, calling on people “not to panic” and to “react to these decisions by keeping our cool”.

“I don’t plan to take into account what this or that person says,” the French leader said, nevertheless describing the agencies’ ratings as “interesting elements”.

Spain’s leader, holding his first news conference since he took power, agreed.

“In the end, the most decisive thing is that each country follow its own path,” Rajoy said.

The new right-leaning Spanish government has announced €8.9 billion ($11 billion) in budget cuts, tax increases to bring in €6.28 billion and an anti-tax fraud battle to recoup another 8.17 billion.

Rajoy said at the weekend that Spain, which declared a towering 21.5-percent unemployment rate in the third quarter of 2011, now had an “astronomical” figure of 5.4 million jobless.

The Spanish leader gave his support to a French-backed scheme to impose a tax on financial transactions.

Sarkozy has said that France should not wait for other European countries to support the tax on financial market deals, a scheme dubbed a “Robin Hood tax” or “Tobin tax,” after Nobel Prize-winning economist James Tobin.

“Spain will support this tax,” Rajoy said, describing it as Sarkozy’s “war horse” to help beat the crisis.

Sarkozy was in Spain to be honoured for helping to battle the armed Basque separatist group ETA.

King Juan Carlos made Sarkozy a Knight of the Golden Fleece in recognition of his cooperation, saying he had been a constant ally in a ceremony in the Royal Palace.

“In your relations with Spain, you have always contributed in a constant, effective and generous manner to the fight against terrorism, always making the victims the aim and end of your solidarity,” the king said.

Spain credits Sarkozy with giving crucial aid in the fight against ETA, both as president and previously when he was French interior minister from 2002-2004 and 2005-2007.

Only on Saturday, French police arrested three suspected ETA members near Auxerre in eastern France.

ETA announced on October 20 last year the end of more than 40 years of shootings and bombings that killed 829 people. Its operations have been hammered by Spanish police working closely with France.

Spain’s highest chivalric honour, the Order of the Golden Fleece was created in 1430 by Philip III, Duke of Burgundy.

The far-right Rassemblement National (RN) is currently far ahead in opinion polls for the June 9th elections in France, with Emmanuel Macron’s centrist Renaissance party in a battle for second place with the Socialists.

The debate between Attal, 35, and Bardella, 28, who leads the RN’s list in the EU elections, will be the first head-to-head clash between the two leading figures in a new French political generation.

Polls have been making increasingly uncomfortable reading for Macron, who has had to fly to the French Pacific territory of New Caledonia to try to calm the violent unrest there.

Coming third would be a disaster for the president, who portrays himself as a champion of European democracy and bulwark against the far right.

The head of Macron’s party list for the elections, the little known Valérie Heyer, has failed to make an impact and was widely seen as losing a debate with Bardella earlier this month.

According to a Toluna-Harris Interactive study for French media, the presidential camp is stuck at just 15 percent of the vote and in a dogfight for second place with the Socialists – who are on 14.5 percent – led by former commentator Raphael Glucksmann.

The RN, by contrast, is soaring ahead on 31.5 percent.

The RN’s figurehead Marine Le Pen, who has waged three unsuccessful presidential campaigns, has sought to bring the RN into the political mainstream as she eyes another tilt at the presidency in 2027.

“There is a very clear signal that must be sent to Emmanuel Macron. He must suffer the worst possible defeat to bring him back to earth,” Le Pen told CNews and Europe 1 this week.

Bardella, who took over the party leadership from his mentor, is key to Le Pen’s strategy, a gifted communicator of immigrant origin with an expanding following on TikTok.

Attal, also one of the best debaters in Macron’s government, is expected to seek to portray Bardella as an extremist, complacent over the threat posed by Russia and who has little interest in Europe.

Apparently aware of the danger, Bardella on Tuesday said the RN will no longer sit in the EU parliament with the Alternative for Germany (AfD) faction, indicating it had lost patience with the controversies surrounding its German allies.

The head of the AfD’s list in the polls, Maximilian Krah, had said in a weekend interview that someone who had been a member of the SS in Nazi Germany was “not automatically a criminal”.

Bardella is “putting his credibility and the future of his movement on the line in the debate”, said the Le Monde daily, adding that a strong performance could see some RN supporters regard him as a stronger candidate in 2027 than Le Pen.

You can find a more detailed profile of Attal HERE and a look at Bardella HERE