Fears of a renewed eurozone crisis and France's spiralling public debt are overshadowing the presidential race, with the Socialist frontrunner François Hollande accusing Nicolas Sarkozy of trying to scare the markets to secure re-election.

With just over a week to go until the first round of voting presidential candidates are at each other's throats over which of them would drive the country to financial ruin. As markets get jittery over Spain and Italy, economists have warned that France could be the next economic basket case to shake the euro.

The eurozone's second-largest economy, with generous welfare and one of the highest levels of public spending in western Europe, has been told by its national auditor it risks an unsustainable debt spiral. Unemployment is at a 12-year high of almost 10%, growth is stalling, the triple A credit rating has been downgraded and the country owes so much that interest repayments are the second biggest item of state expenditure after education.

In a country where voters do not want to sacrifice social welfare to the altar of austerity, analysts warn none of the main candidates are going far enough to slash spending. The French social model, with its wide-ranging benefits, remains paramount. In France, the word austerity is a political taboo and there has not been a balanced budget since 1974.

Sarkozy, styling himself as the only figure who could save France from economic implosion, said that if Hollande won the final vote on 6 May it would spark a speculation run by financial markets and plunge the country into disarray.

"If we start hiring civil servants, if we start spending again, if we throw the pension reform into question, it's not a risk that interest rates will rise, it's a certainty," he said, warning of an immediate "crisis of confidence". He has repeatedly warned Hollande would lead France towards the fate of Greece or Spain.

The prime minister, Francois Fillon, said victory for the left would unleash unstoppable speculation against the euro. Hollande shot back that Sarkozy was encouraging market volatility for political ends. "What is in France's interest is fighting speculation, not encouraging it under the pretext of helping him in the presidential election," Hollande said on France 2 television. He said he was committed to restarting growth and sticking to deficit cutting, adding: "I have no reason to fear a crisis."

The Socialists accuse Sarkozy's right-wing government of plunging the country further into debt over the past five years, failing to solve the euro crisis and losing France its top credit rating.

Mudslinging over the euro-crisis has cranked up suspense over the election result. Over 60% of French people think the financial crisis is not over. Few believe Sarkozy's assertion last month that it was over.

Unable to pay pensions or public workers' salaries without huge borrowing, and with Brussels breathing down Paris's neck, both Hollande and Sarkozy have vowed to restore public finances and stabilise public spending. Sarkozy wants to bring France's deficit to zero by 2016, and Hollande by 2017. But there has been little detail over how state spending will be curbed. Hollande wants to restore growth and press on with creating 60,000 new posts in France's ailing education system, while raising taxes on the rich and big companies. He is also seeking to reopen talks on the EU's fiscal pact on debt reduction. Sarkozy has not committed to harsh austerity measures, but plans tax rises of his own. Markets fear neither candidate is going far enough towards tough spending cuts and major structural reforms.

Jacques Attali, an economist who advised the last Socialist president, Francois Mitterrand, warned of the terrible hangover awaiting France the day after the election, whoever wins. He said when the dire state of finances became clear, a government could find itself making harsh spending cuts or raising taxes, which could see French workers take to the streets in huge strikes.

Preaching rigour and budget cuts is unlikely to win votes in France. Francois Bayrou, the centrist who has stressed the danger of the French debt crisis, has seen his support fall. He warned this week: "For the first time in a presidential election we are experiencing, hour by hour, in real time, in a neighbouring country, Spain, what risks happening here in France in a few weeks." Meanwhile, Jean-Luc Mélenchon, the radical leftist who opposes austerity, has seen his support rise.

Sarkozy is ahead in surveys for the first round on April 22. The latest poll by LH2 showed Hollande winning the 6 May run-off by 10 points.