His comments came after European markets suffered heavy losses on Tuesday caused by fresh worries over the eurozone debt crisis as Spanish and Italian borrowing costs have risen sharply in recent days.
Hollande, who is leading in polls to win the two-round vote on April 22 and May 6, has vowed to hire thousands of new teachers and to slow the effect of Sarkozy's deficit-cutting austerity measures.
"If we start hiring state employees, start spending... we will immediately trigger a massive crisis of confidence," Sarkozy said on France Info radio.
"France must borrow 42 billion euros ($55.0 billion) every year to pay theinterest on its debt. Today we are raising this money, we borrow this money at less than three percent, which is a historically low rate. If we do not follow the line of reducing our deficit and debt, the interest rates will quickly rise."