Sarkozy defends self amid finance scandal

French President Nicolas Sarkozy reacts as he waits for his newly elected German counterpart Christian Wulff, unseen, at the Elysee Palace in Paris, Wednesday, July 7, 2010. French prosecutors have opened a preliminary investigation into allegations that the country's richest woman secretly funded President Nicolas Sarkozy's election campaign, a judicial official said Wednesday. Sarkozy has denied claims that his 2007 campaign received euro 150,000 ($188,000) in secret cash from 87-year-old L'Oreal heiress Liliane Bettencourt, and called the reports an effort to smear him. (AP Photo/Michel Spingler)

French President Nicolas Sarkozy defended himself on national television against allegations of illegal financing for his 2007 election campaign, claims that have threatened the government’s credibility as it fights for unpopular cost-cutting reforms.

The President said Labour Minister Eric Woerth, who is at the heart of the scandal, would keep his job in the government. But apparently bowing to public pressure, Mr. Sarkozy said he advised Mr. Woerth to resign from his contested second job, as the treasurer of their conservative UMP party.

Mr. Sarkozy, whose poll ratings have slipped to his lowest point in three years in office, described the party financing allegations as a “campaign” against him.

Speaking to

France 2 television in the garden of the presidential Elysee Palace on Monday, he steered the questions away from the scandal toward his efforts to modernise France, casting himself as a tireless leader willing to put himself on the line to save France from its untenable expectations about government social protections.

“When you carry out reforms ... you bother a certain number of people,” Mr. Sarkozy said. “And the response is often slander.”

Politicians left and right had urged Mr. Sarkozy to respond publicly to allegations by a former accountant to L’Oreal heiress Liliane Bettencourt that she gave euro150,000 (190,000 dollars) in cash to Mr. Woerth, party treasurer, during the 2007 presidential campaign. The alleged sum would greatly exceed legal limits for campaign donations.

Mr. Sarkozy has denied the claims, which have not been proven. French prosecutors have opened a preliminary investigation.

The President has seen diplomatic successes from Libya to New York but barely a quarter of his compatriots support him, pollsters say. He has less than two years before 2012 presidential elections when he could face a surprising threat from the opposition Socialists, who are buoyed by his current troubles.