Archives
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010

December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009

December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008

December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007

December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006

December 2005
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005
April 2005
March 2005
February 2005
January 2005

December 2004
November 2004
October 2004
September 2004
August 2004
July 2004
June 2004
May 2004
April 2004
March 2004
February 2004
January 2004

December 2003
November 2003
October 2003
September 2003
August 2003
July 2003
June 2003
May 2003
April 2003
March 2003
February 2003
January 2003

December 2002
November 2002
October 2002
September 2002
August 2002
July 2002
June 2002
May 2002
April 2002
March 2002
February 2002
January 2002

December 2001
November 2001
October 2001
September 2001
August 2001
July 2001
June 2001
May 2001
April 2001
March 2001
February 2001
January 2001

December 2000
November 2000
October 2000
September 2000
August 2000
July 2000
June 2000
May 2000
April 2000
March 2000
February 2000
January 2000

December 1999
November 1999
October 1999
September 1999
August 1999
June 1999
May 1999
April 1999

April 1998

At Davos, Sarkozy Calls for Global Finance Rules

New York Times
January 28, 2010
By KATRIN BENNHOLD

Email this page

DAVOS, Switzerland — France wants to use its presidency of the Group of 20 next year to create a new international monetary system, President Nicolas Sarkozy said on Wednesday, adding that he believed the dollar should no longer be the primary reserve currency in the global economy.

In an expansive and lofty speech to the business and political leaders gathered here at the annual World Economic Forum, Mr. Sarkozy also called for a “revolution” in international regulation that would make labor, health and environmental standards as enforceable as trade rules.

Like Prime Minister Gordon Brown of Britain, he backed a tax on financial market transactions. But Mr. Sarkozy, pursuing his call for a more moral form of financial capitalism, suggested the proceeds be used to combat climate change and create a World Environment Organization as powerful as the World Trade Organization.

Mr. Sarkozy also took a hard line on bankers’ bonuses, saying that lavish rewards should be denied to those who destroy wealth and jobs.

But before an audience that contained many Americans and many Chinese, his comments on currencies may have had the greatest resonance.

“We need a new Bretton Woods,” Mr. Sarkozy told a packed auditorium. “We can’t have on the one hand a multipolar world and on the other a single reserve currency on a global level.”

In a thinly veiled reference to China keeping its currency at an undervalued level, he added: “We cannot on the one hand laud free markets and on the other tolerate monetary dumping.”

During its 2011 presidency of the Group of 8 — the leading Western industrial powers plus Russia — and the wider G-20, which includes several important developing nations, France “will put the reform of the international monetary system on the agenda,” Mr. Sarkozy said.

Mr. Sarkozy also warned that the economic recovery currently under way remained vulnerable, urging central banks against withdrawing monetary stimulus measures too abruptly, saying it could prompt a collapse of the world economy.

"We must take care to prevent too abrupt a tightening,” he said.

Mr. Sarkozy's speech found few supporters among bankers and executives at a dinner here Wednesday evening. Some managers said his call for a new monetary system was merely an attempt to increase the importance of the euro and raise France's profile ahead of next year's Group of 20 meetings. Mr. Sarkozy's endorsement of plans put forward earlier by Britain to tax financial transactions also failed to stir the audience.

The powerbrokers at Davos were not Mr. Sarkozy’s only audience. Six weeks ahead of regional elections in France, which are widely expected to be at least partly a judgment on his presidency, the president has tried to reverse a decline in his approval rating, currently at a record low.

“It was an effective, quite populist speech,” said Timothy Garton Ash, a professor at Oxford and political commentator who was in the audience. “As always at Davos, national leaders are at least half talking to their own audience.”

In 2008, when France held the presidency of the European Union for six months, Mr. Sarkozy proved a dynamic — if controversial — leader, first negotiating a ceasefire that halted the war in Georgia with Russia, and then bringing together European leaders to coordinate their response to the financial crisis.

As president of the G-20, he could repeat that performance, and even observers who find his style at times overbearing applaud his tenacity and energy.

“The dynamism of the chair,” Mr. Garton Ash said, “may bring some more substance to the G-20.”

Mr. Sarkozy was the first French president to give the keynote address at the Davos forum, and it afforded him the chance to pit well-paid bankers against ordinary citizens.

He reiterated themes that have resounded in recent days, starting with President Obama, who proposed a tax on banks’ liabilities, and then went further, suggesting that their size should be limited.

The French president said he agreed with Mr. Obama, but stressed that all regulation concerning banks should be dealt with at an international level, coordinated by the G-20.

Calling the current crisis a “crisis of globalization itself,” he urged broad coordination of regulation and accounting rules.

“If competition is distorted by accounting rules that remain very different from one country to another, and one continent to another, market actors will find it normal to return to precrisis habits,” Mr. Sarkozy said. “How, in a competitive world, can we demand of European banks three times more capital to cover their risks in their activities and not ask the same of American and Asian banks?”

His aim was not, he stressed, to do away with capitalism itself but to tame financial markets. To this aim, a tax, he said, was now unavoidable.

“We can’t escape the debate about taxing speculation,” Mr. Sarkozy said. “Whether you want to rein in frenetic financial markets, finance development aid or associate poor countries to the fight against climate change, everything brings us back to the taxation of financial transactions.”

NOTICE: In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving this information for research and educational purposes.