It is "not for Germany to decide for the rest of Europe", said Francois Hollande, the frontrunner to replace Nicolas Sarkozy as French president.
If elected, Mr Hollande says that he will not pass the fiscal austerity pact agreed by the leaders of 25 European nations, unless it contains measures to spur on growth.
His stance puts him on a collision course with Angela Merkel, the German Chancellor. She hit back at the French Socialist candidate's plans, warning the deal is "not open to new negotiations".
"The fiscal pact is negotiated, it was signed by 25 government leaders and has already been ratified by Portugal and Greece," she told a German newspaper.
"Parliaments across Europe are on the verge of passing it. Ireland is having a referendum at the end of May."
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Spain is in a crisis "of huge proportions", the foreign minister, José Manuel García-Margallo, has said after official figures showed unemployment had hit almost 25% amid concerns that the country's banking sector may need a €120bn (£98bn) bailout before the end of the year.
The jobless rate stood at an 18-year high after the latest figures showed it at 24.4%, or 5.6 million people out of work. Unemployment is now the focus of debate in the country as policymakers worry about the effects of a collapse in consumer spending, a drop in tax receipts and spiralling bad debts.
Standard & Poor's, the ratings agency that downgraded Spain's credit status on Thursday, said it was concerned the situation was worsening and rising defaults on loans and mortgages could quickly undermine the banking sector.
Critics of the rightwing administration headed by Mariano Rajoy said government policies were partly to blame for making the situation worse. The rate has soared on the back of labour reforms that make it easier and cheaper to sack people. Some 374,300 jobs were lost in the first three months of this year, representing an estimated loss of €953m in income tax receipts.
An austerity budget passed last month which pushed up education and health charges while cutting benefit payouts is also blamed for undermining household incomes and prolonging the recession
The chaotic situation caused further falls on the Madrid stock exchange and interest rates on 10-year sovereign bonds touched 6%. S&P expects the Spanish economy to shrink by 1.5% this year and 0.5% in 2013. The agency does not expect the creation of new jobs in Spain before 2015. Fernando Jiménez Latorre, the secretary of state for the economy, said he did not expect unemployment to rise above 25% this year. He complained that S&P had not taken into account all of the adjustments the government had made, such as capping the budgets of the regional governments. Its analysis was "short term" he said.
Alfredo Pastor, an economist at the IESE business school in Madrid, said: "In the big numbers, we are not going to see the effects of the labour market reform before 2013. In fact, Spain needs deeper reforms that are effective and productivity enhancing. In the current recession, as well as labour reform, the government needs to take other measures, such as helping credit flow to business in order to help create jobs."
In his blog for the financial daily Expansión, Ismail de la Cruz asks: "How much longer can this state of affairs last? Not much. We can't discount the likelihood that the Spanish banking sector will need external help from Europe before the end of the year. The problem is that Spain is not capable of doing this with its own resources and it's hard to find foreign investors who are prepared to take the risk. Which leaves no option but a European rescue fund."
François Hollande is predicted to win France's presidential election, but his victory could endanger the euro zone's carefully negotiated fiscal pact. He also wants to water down the European Central Bank's statutes, forcing it to lend more to promote economic growth. But his plans would do little more than borrow time -- and they could be very dangerous for Germany.
For reasons of data protection and privacy, your IP address will only be stored if you are a registered user of Facebook and you are currently logged in to the service. For more detailed information, please click on the "i" symbol. The whole ghastly process is now set in motion. Not just for Chancellor Angela Merkel, but also for anyone who still had a modicum of hope that the worst of Europe's debt crisis had already been overcome. The opinion pollsters were right -- François Hollande won the first round of the French presidential election last Sunday. According to all the polls, he will also win the runoff vote on May 6. If he wins, he would become the second Socialist president of the Fifth Republic, following in the footsteps of François Mitterrand. For France's neighbors and the fight against the sovereign debt crisis in Europe, that will set everything back to square one. Hollande has said that if he's elected, he will seek to renegotiate parts of the already painstakingly negotiated European fiscal pact. He has disparagingly called it the "Merkel-Sarkozy" pact and says he wants to renegotiate it or block it if necessary. He is demanding that "austerity policies be complemented by growth." And while he's at it, he also wants to change the statutes of the European Central Bank so that it would also be given the official duty of facilitating growth.
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