"I do not believe that a referendum is the best way to answer such complex questions as the rebuilding of Europe, which is of the competence of parliamentary representation," Sarkozy told Le Monde newspaper in an interview published on Tuesday.
At the same time, the debate on Brexit is "an opportunity to rebuild Europe," the former French leader noted.
"I propose to create a euro-Schengen, a Schengen government composed of interior ministers of the member countries, with a permanent president who would have authority over [EU Border Agency] Frontex," the former French leader said, as quoted by the daily.
UK citizens are set to vote on June 23 in a referendum on the country's EU membership, after UK Prime Minister David Cameron and the leaders of 27 other EU member states reached a deal in February to grant the United Kingdom a special status within the bloc.