By Catherine Bremer and Emmanuel Jarry
PARIS (Reuters) - President Nicolas Sarkozy pledged to achieve a budget surplus for the first time since 1974 and cut France's swelling debt if re-elected on May 6, warning that his Socialist rival would lead the country towards the fate of Greece or Spain.
Presenting an austere manifesto 17 days ahead of the first round of voting on April 22, Sarkozy said he would put a "golden rule" to parliament in July that would commit France to balance its budget, as promised to European partners.
Struggling to beat Socialist Francois Hollande and secure a second term, Sarkozy is increasingly playing on voters' fears about the economy to portray his rival as an unsafe pair of hands at a time when Europe is still in crisis.
"Some countries in Europe are on the edge of a precipice today. We cannot refuse to make the historic choice of competitiveness, innovation and reducing public spending," said the conservative Sarkozy, who trails Hollande in polls for the run-off.
"To depart even slightly from the commitments France has made would mean a crisis of confidence," he said.
In another dig, Sarkozy said the speed of market reactions today meant that whereas it took the last Socialist president, Francois Mitterrand, two years to plunge France into crisis in the 1980s, the left today might manage it in just two days.
Polls show that stubborn unemployment and stagnant household income are voters' top worries today, far ahead of issues such as crime and immigration which got Sarkozy elected in 2007.
Sarkozy, who himself presided over an explosion of the debt and deficit after the 2008 financial crisis, said his programme would generate a budget surplus of 0.5 percent of gross domestic product in 2017 after achieving balance in 2016, and public debt would fall to 80.6 percent from a peak of 89.4 percent in 2013.
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Other stories on French election
Election polls graphic http://r.reuters.com/was36s
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Sarkozy called for a mass rally of the "silent majority" to support him on Paris' central Place de la Concorde on April 15 - a week before the first ballot.
"RETAKE THE BASTILLE"
He seemed to be trying to emulate hard-left candidate Jean-Luc Melenchon, who has stormed to third place in some opinion polls after leading a march of tens of thousands of leftists to "retake the Bastille" last month, symbolically re-enacting one of the high points of the 1789 French Revolution.
Pre-empting Sarkozy's attack on his spending plans, Hollande told Canal+ television early on Thursday that if elected he would immediately order an audit of public finances and could freeze some spending plans.
The battle over debt and deficit came after a cover story in the Economist weekly entitled "France in Denial" made waves in political circles by accusing the two rivals of lacking serious ideas for tackling the country's economic and fiscal problems.
Sarkozy said Hollande's plan to lower the retirement age to 60 from 62 for people who started work at age 18 or younger showed it was the Socialist who was in denial.
"That proposal alone is a negation of the existence of the crisis, and the existence of an outside world," he said.
Earlier, Foreign Minister Alain Juppe, tipped as a possible prime minister if Sarkozy wins, said Hollande's economic and European plans were an "explosive cocktail" that could derail Europe's exit from its debt crisis.
"EXPLOSIVE COCKTAIL"
"The cocktail of these two measures, the immediate spending without savings, in other words slippage in our public finances, and secondly, throwing the EU treaty into question, could cause the system to explode," Juppe said.
Latest polls show Sarkozy just ahead or level with Hollande in round one, with Melenchon edging ahead of far-right candidate Marine Le Pen for third place and centrist Francois Bayrou sliding to fifth. But all show Hollande ahead with at least 53 and up to 56 percent support for the decisive second ballot.
To win, Sarkozy needs centrist and far-right voters to rally behind him in round two, but surveys show many of those people will give their runoff votes to Hollande.
The harsh language from Sarkozy's camp kept up a long-running exchange of barbs. Fuming after Sarkozy recently told a reporter Hollande was "nul" - a word that translates as "useless" or "pathetic" - the Socialists derided him for taking so long to produce a manifesto.
"It's not very serious," said Socialist Party chief Martine Aubry, noting Hollande presented his programme in January.
"Sarkozy's programme is his record of the past five years, only worse," said Hollande, who asserts that the wealthy rather than the needy benefited most from tax giveaways since 2007.
The Socialist, who wants to hire 60,000 school staff and create 150,000 state-aided jobs, said he hoped to recruit 4,000 school support staff before the new academic year in September.
(Additional reporting by Nick Vinocur, Yann Le Guernigou and Daniel Flynn; Editing by Paul Taylor and Giles Elgood)
