Lagarde denies 'rumours' that Sarkozy threatened euro pullout

AFP - French Finance Minister Christine Lagarde on Friday dismissed claims that President Nicolas Sarkozy had threatened to pull out of the eurozone, branding them "rumours" and "almost insulting".

"I will only say these rumours are completely unfounded ... and I have no additional comments, I think its almost insulting," Lagarde said at a meeting of the European Bank for Development and Reconstruction (EBRD) in Zagreb.

Earlier on Friday Spain's El Pais newspaper quoted Prime Minister Jose Luis Rodriguez Zapatero telling Socialist Party leaders that Sarkozy had threatened to pull France out of the euro currency group to force Germany to help Greece with its debt crisis.

Spain, France and Germany all denied the report, but it increased investors' concerns over the euro single currency, which plunged to an 18-month low on Friday.

El Pais, which is close to Spain's ruling Socialist Party, said Sarkozy made the threat at a Brussels summit of EU leaders last week that sealed a rescue package for Athens.

Germany, Europe's biggest economy, has been the most reluctant euro nation to help the Greek government overcome its debt crisis.