• France's news in English

Sarkozy: Europe faces 'unprecedented crisis'

AFP · 16 Jan 2012, 17:59

Published: 16 Jan 2012 17:59 GMT+01:00

Facebook Twitter Google+ reddit

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.

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.

Story continues below…

"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.

Facebook Twitter Google+ reddit

Today's headlines
Homeless man dines at top tables in France, then runs off
Photo: Prayitno/Flickr

"A man's gotta eat," he told police, after racking up gigantic bills in some of France's plushest restaurants.

Underwater museum hopes to make a splash in Marseille
A similar underwater museum piece by Jason deCaires Taylor. Photo: julie rohloff/Flickr

Don't forget your scuba gear...

Why Toulouse is THE place to be in France right now
Photo: Jacme/Flickr

Move over Paris...

And France's top chef of the year is... 'Monsieur Idiot'
Alexandre Couillon might have an unfortunate name, but he can sure cook!. Photo: AFP

Look beyond the name. He's the man who turned his family's humble "moules frites" joint into one of France's best seafood restaurants.

Could France do more to ease the worries of 'Brexpats'?
Photo: AFP

Paris is rolling out the red tape for British firms, so why not British citizens in France?

Brexit: Brits in France could face 'cataclysmic' impact
Photo: AFP

Can't France make it easier for Britons to get French nationality?

In their own words: Why French police are in revolt
"Solidarity with our colleagues". Police protesting near Paris. Photo: AFP

Police have staged protests for three nights in a row across France. Here's why they say they're fed up.

France leaning right six months before election
Candidates for the right-wing Les Republicains Alain Juppe and Nicolas Sarkozy. Photo: AFP

... and the left has been left in suspended animation.

Disgruntled French police stage protests for third night
Photo: AFP

The French government is struggling to deal with a revolt among the country's police force.

Scarlett Johansson to run Paris gourmet popcorn shop
Photo: AFP

She'll even be serving customers apparently.

Sponsored Article
How to vote absentee from abroad in the US elections
Video: New homage to Paris shows the 'real side' of city
Sponsored Article
Last chance to vote absentee in the US elections
The 'most dangerous' animals you can find in France
Swap London fogs for Paris frogs: France woos the Brits
Sponsored Article
How to vote absentee from abroad in the US elections
Anger after presenter kisses woman's breasts on live TV
Is France finally set for a cold winter this year?
IN PICS: The story of the 'ghost Metro stations' of Paris
How to make France's 'most-loved' dish: Magret de Canard
Welcome to the flipside: 'I'm not living the dream in France'
Do the French really still eat frogs' legs?
French 'delicacies' foreigners really find hard to stomach
French are the 'world's most pessimistic' about the future
Why the French should not be gloomy about the future
This is the most useful French lesson you will ever have. How to get angry
Why is there a giant clitoris in a field in southern France?
French pastry wars: Pain au chocolat versus chocolatine
Countdown: The ten dishes the French love the most
Expats or immigrants in France: Is there a difference?
How the French reinvented dozens of English words
The ups and downs of being both French and English
How Brexit vote has changed life for expats in France
Twelve French insults we'd love to have in English
What's on in France: Ten of the best events in October
Want to drive a scooter around Paris? Here's what you need to know
jobs available