Sarkozy vows 'liars' won't stop reforms

PARIS - French President Nicolas Sarkozy yesterday emerged from his political lair in fighting mood, blasting those who had tarred him with corruption as liars and vowing to keep his Government and reform programme on track.

"When you try to push through change, you upset entrenched interests, you disturb a number of people and the response, quite often, is slander," Sarkozy said in an hour-long TV interview aimed at defusing the pressure on his presidency.

Almost like a cornered animal, Sarkozy jabbed his forefinger and sputtered with rage as he painted himself as honest, hard-working and committed to hauling France out of sloth and decline. The reward for these efforts, said Sarkozy, his voice dripping with contempt, was to be a target.

He likened those who accused him of pocketing cash donations from France's wealthiest woman, Liliane Bettencourt, with those who had peddled rumours about his marriage with supermodel Carla Bruni - and with a smear campaign in 2006 that alleged he had taken kickbacks via a financial house, Clearstream.

"Three months ago, my wife and I endured the worst gossip and lies. Four years ago, when I took over the presidency of the UMP [Union for a Popular Majority] party, I had to deal with the unbelievable Clearstream affair.

"And now, when we are trying to reform the pension system, I am being portrayed as someone who for the last 20 years has been going to Mrs Bettencourt to pick up envelopes. It's a disgrace!"

Sarkozy's fightback came after the worst week in his three-year term saw his popularity rating slump to the lowest of any French President in the past 50 years.

Already struggling with a plan to extend the legal age of retirement from 60 to 62, Sarkozy was accused in a press report of pocketing cash-stuffed envelopes from Bettencourt while he was previously mayor of Neuilly, a suburb of Paris.

His Labour and Budget Minister, Eric Woerth, who is also treasurer of the UMP, is also under fire.

Woerth is accused of accepting €150,000 ($265,543) in campaign donations from Bettencourt and of a conflict of interest, for his wife worked for the firm that managed the L'Oreal heiress's €17 billion fortune.

Bettencourt plotted to evade taxes, according to conversations secretly recorded by the heiress' butler and published by a website last month.

The source for the accusations surrounding Sarkozy - Bettencourt's former accountant - has retracted suggestions that he was a regular visitor or that he picked up cash. An investigation by a panel under the Finance Ministry has cleared Woerth of any evidence that he sought to protect Bettencourt from tax inspectors.

Three other inquiries are continuing into the 87-year-old Bettencourt's dealings, and yesterday police carried out seven raids on homes and offices.

Opposition critics want the appointment of an independent examining magistrate.

Sarkozy stood by Woerth, describing him as "a deeply honest man who has been enduring lies and slander for the past three weeks." He batted away demands for Woerth to be eased out in a swift reshuffle. Any Cabinet change would take place in October, after Woerth had steered the pensions bill through Parliament.

But he said he would suggest to Woerth that he step down as party treasurer "in order to devote himself exclusively to pension reform."

After descending into the political fray, Sarkozy today had the chance to make a final impact on the public before the long summer break. He was due to make the traditional nationwide address on the eve of Bastille Day.