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The European debt crisis wrecking ball is not just destroying economies. It is smashing the careers of government leaders everywhere. Since Greece began its plunge into economic Hades almost two-and-a-half years ago, the prime ministers of Britain, Italy, Greece, Spain, Portugal and Ireland have all gone ungently into the night. France's Nicolas Sarkozy could be next.

How could this be? Mr. Sarkozy was elected in 2007 on a wave of optimism. He was a force of personality, a bundle of twitchy energy on a mission to restore France's economic, cultural and military glory. His catchy message was "work more, earn more." His risky Libya mission paid off. He had a glamorous supermodel wife – Carla Bruni – who gave his life a touch of fairy tale magic. He was not afraid to let you know that he liked money, success and fat Cuban cigars. President Bling Bling, they called him.

Now he's on the defensive, trailing in the polls, and faces being trounced by an unlikely candidate, the bland (in comparison) François Hollande of the Socialist Party, while Marine Le Pen, of the xenophobic, anti-euro, extreme right Front National party, is coming on strong. Their wildly divergent views of what will fix France and the euro zone, or whether France should even use the euro, reflect the existential debate raging within almost every euro zone country. Never has skepticism about the euro project been greater or potentially more damaging to economic prosperity.

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France's deepening economic woes are behind Mr. Sarkozy's falling fortunes. Guess what? Turns out that mighty France, Europe's second-biggest economy, wasn't immune to debt crisis or the gormless austerity campaigns that are laying waste to the euzo zone's Mediterranean flank. France's reversal has been shocking for a country that prided itself as Germany's moral and economic peer, the Latin half of the Franco-German team that would keep intact the euro zone, as well as the European Union, the world's largest trading bloc.

But look what has happened. In January, France lost its cherished triple-A credit rating: Mr. Sarkozy had promoted the rating as a national badge of honour, a strategic error on his part, and it has opened him up to legitimate accusations of economic mismanagement.

Jobs are disappearing at an alarming rate. France's industrial sector alone has shed about 500,000 jobs. France's unemployment rate, at 9.8 per cent, is worse than Italy's (8.6 per cent). Ditto its budget deficit, forecast this year at 5.4 per cent (versus Italy's 2 per cent) of gross domestic product. The national debt is climbing relentlessly and is forecast to reach 92.5 per cent of GDP this year – that's up by more than a third since Mr. Sarkozy took power – making it Europe's second-most-indebted country, after Italy. France has not recorded a trade surplus since 2002 and, according to Deutsche Bank, is forecast to run a current account deficit of 2.8 per cent this year.

Sadly for Mr. Sarkozy, the performance of the French economy has turned into a popularity contest and he isn't on top. The latest polls put Mr. Hollande leading Mr. Sarkozy by 31 per cent to 23.5 per cent in the spring election. Ms. Le Pen comes in third at 20 per cent, making her a formidable force. Mr. Sarkozy is a good campaigner (he has yet officially to launch his comeback bid), so the next polls may show a narrowing between the two top candidates. Still, Mr. Sarkozy could easily lose.

The platforms of the three top candidates are derivations of arguments that you might hear in any euro zone bar, where opinions about the merits of the euro are all over the map. Ms. Le Pen would yank France out of the euro. She considers it a failure and an affront to sovereignty. "Let the euro die a natural death," she has said.

At the other end is Mr. Hollande. He is pro-euro zone, as is Mr. Sarkozy. Where he differs with Mr. Sarkozy is on how to save the euro. He wants the European bailout fund to be given the greatest amount of firepower possible and wants to see the launch of euro bonds, which would allow countries with punishing borrowing costs to hijack Germany's triple-A rating. He also wants the European Central Bank to load up on the sovereign bonds of distressed countries. He argues that austerity should be diluted somewhat in favour of growth measures.

And Mr. Sarkozy? He is taking, or has been cozened into taking, the German view. Austerity, yes, and yes to freeing up the labour market by raising consumption taxes to fund lower costs for employers.

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But euro bonds and unleashing the ECB to load up on sovereign debt? Forget it. While Mr. Sarkozy probably would personally welcome such moves, they are opposed by Ms. Merkel and therefore non-starters. His allegiance to Ms. Merkel is so strong that she has offered to campaign on his behalf in the French election. No doubt, Mr. Sarkozy will return the favour if he wins – Ms. Merkel is up for re-election next year.

Which way will French voters go? The choices are a France that looks a lot like Germany, a France that drops the euro, or an austerity-lite France kept afloat by euro bonds and the ECB, a scenario that Germany would resist. Most euro zone countries are going through similar decision turmoil. Translation: The existential crisis is far from over and it may cost Mr. Sarkozy his job.

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About the Author
European Columnist

Eric Reguly is the European columnist for The Globe and Mail and is based in Rome. Since 2007, when he moved to Europe, he has primarily covered economic and financial stories, ranging from the euro zone crisis and the bank bailouts to the rise and fall of Russia's oligarchs and the merger of Fiat and Chrysler. More

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