* Angry Sarkozy accused Socialist rival of lying in debate
* Debate seen as conservative leader's last hope of catching
* Hollande leads runoff polls, Le Pen won't endorse Sarkozy
(Releads with Bayrou announcement)
By Catherine Bremer and Daniel Flynn
PARIS, May 3 Nicolas Sarkozy's fragile hopes of
re-election took a heavy blow on Thursday when a leading
centrist backed Socialist frontrunner Francois Hollande, a day
after the French president failed to land a knockout blow on his
rival in a televised debate.
Opinion polls after Wednesday's nearly three-hour duel,
watched by over a third of the 46 million-strong electorate,
showed Sarkozy narrowing Hollande's lead slightly before
Sunday's runoff for the presidency, but failing to discredit his
rival in the eyes of most voters.
Sarkozy's prospects suffered another setback when centrist
Francois Bayrou, who came fifth in last month's first round with
9 percent of the vote, announced he would vote for Hollande,
criticising the president's tough language on immigration and
"The line that Nicolas Sarkozy chose between the two rounds
is violent, it contradicts our values, not just mine, not those
of the movement I represent," Bayrou told a news conference.
Seeking to save his political skin, Sarkozy has appealed to
the nearly one-fifth of voters who backed far-right candidate
Marine Le Pen in round one, warning them against following the
National Front leader who said she would cast a blank vote.
He also implored voters not to elect what would be the first
left-wing French president in 17 years.
"The Left has ruined the Republic with its softness on
sectarianism, on crime, on legal immigration," Sarkozy said at a
rally in the southern city of Toulon. "We have one day left to
convince people, one day for the sweetest victory in history."
To stay in office, Sarkozy needs to accomplish a
near-impossible balancing act of winning over about 80 percent
of Le Pen's voters while attracting the lion's share of Bayrou's
more moderate, socially-liberal supporters.
So far, he has tried to woo backers of Bayrou's Democratic
Movement with promises to write a balanced budget rule into the
constitution, something Hollande has refused to support.
An OpinionWay-Fiducial survey conducted before and after the
TV debate showed Sarkozy narrowing the gap to five points, with
47.5 percent to the Socialist's 52.5 percent, the smallest gap
so far. Other recent polls give a six to 10 point difference.
A survey by LH2 found Hollande, who remained calm in the
debate against a visibly tense Sarkozy, dispelled some voters'
doubts about his lack of experience, with 45 percent rating him
as more convincing versus 41 percent for Sarkozy.
"Sarkozy was the favourite for the debate and he failed to
win: Hollande took it on points," said Christian Delporte, a
political and media analyst. "Hollande had a real challenge - to
show that he was presidential material - and he managed it."
SPARRING OVER EUROPE
French media mostly agreed that Hollande, who used flashes
of wit to unbalance his pugnacious rival, remains on track to
become France's first Socialist president since Francois
Mitterrand left office in 1995.
"Hollande still favourite after the debate," Le Monde wrote
on its front page. Even right-wing Le Figaro newspaper noted
that, since every euro zone leader to seek re-election since
2008 had lost, Sarkozy faced an uphill battle.
Hollande, 57, was confident and relaxed in the early
exchanges of Wednesday's contest, promising to be "the president
of unity" and accusing Sarkozy of dividing the French people.
He accused Sarkozy, also 57, of using the global economic
crisis as an excuse for failing to keep a 2007 promise to cut
unemployment to 5 percent. "With you it's very simple: it's
never your fault," Hollande said.
Sarkozy, stressing the inexperience of a rival who has never
been a minister, repeatedly accused his opponent of lying about
economic figures and reeled off reams of statistics in an
attempt to swamp his adversary.
Deriding Hollande's pledge to be a "normal president",
Sarkozy said: "Your normality is not up to the challenge."
Markets, however, appeared unworried by the prospect of a
win by Hollande, who vows to raise taxes on large companies and
increase marginal tax rates for top earners to 75 percent.
The yield on 10-year French bonds held steady below 3
percent at an auction on Thursday, while the Paris CAC stock
index was slightly lower, in line with most of Europe.
Hollande has soothed investors' concerns in recent weeks by
moderating his call for the renegotiation of a German-inspired
European budget discipline treaty, which many had feared would
derail efforts to deal with the euro zone crisis. He said he
would balance the French budget by 2017, just a year later than
"Supposing Francois Hollande wins the election on Sunday, we
do not expect a major policy shift with respect to the fiscal
stance in France," JP Morgan economist Raphael Brun-Aguerre
Europe was one of the main subjects of Wednesday's debate,
as well as the sickly economy, high unemployment, nuclear power
"The example I want to follow is Germany and not Spain or
Greece," Sarkozy said, declaring that he and German Chancellor
Angela Merkel had saved Greece from an economic wipeout and
avoided the collapse of the euro currency.
"Europe has got over it," Sarkozy said of the crisis.
Hollande, who says he wants to defend millions of Europeans
at threat from government cutbacks, shot back: "Europe has not
got over it. Europe is today facing a possible resurgence of the
crisis with generalised austerity. That's what I don't want."
Sarkozy, being punished in part for his brash manner, is the
most unpopular president to run for re-election and the first in
recent history to lose a first-round vote.
(1 = 0.7603 euros)
(Additional reporting by Paul Taylor, Alexandria Sage, John
Irish, Pauline Mevel, Emmanuel Jarry and Elizabeth Pineau;
Editing by Paul Taylor and David Stamp)