Sarkozy's stresses challenges ahead in (election) new year

France's president Nicolas Sarkozy declared on Saturday night in his traditional New Year's Eve speech that neither the markets nor the agencies would decide French policies. 

Reuters/TF1 Television/Handout

On the eve of a Presidential election year in France and trailing the Socialist candidate François Hollande in the polls, Sarkozy told the French that he would announce no new austerity measures in 2012.

The government has already imposed two deficit-cutting packages aimed at saving a total of 72 billion euros.

Sarkozy hit back at accusations that his government had gone too far in trying to appease financial markets and credit rating agencies, in a bid to hold on to France's triple-A credit rating.

"I say this for everyone to hear, neither the markets nor the agencies will decide French policies," he said.

He also alluded to recent shifts within European Union politics, saying "Emerging from the economic crisis, building a new model for growth, giving birth to a new Europe, these are some of the challenges that await us."

In his own New Year's Eve message, Socialist candidate François Hollande criticised Sarkozy's handling of the economy, and said his presidency had been "inconsistent, incoherent and unjust".

France will vote in the first round of the presidential election in April and potentially a second round in May.

As well as the Socialist challenge, Sarkozy faces competition on the far-right from National Front candidate Marine Le Pen and from centrist candidate François Bayrou, who came third in the 2007 election.