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Sarkozy seeks a new order and throws down gauntlet to China
Helen Power, The Times
President Sarkozy has promised to put the huge trade imbalances between the East and West at the centre of global financial reform when France takes over leadership of the G8 next year.
In a speech at the World Economic Forum in Davos yesterday, Mr Sarkozy called for a more responsible form of capitalism for the 21st century and backed President Obama in his attempts to break up some of the world’s biggest banks.
Yet it was Mr Sarkozy’s new promise to press countries with huge trade surpluses — such as China — to revalue their undervalued currencies that captured attention. It echoed similar comments by George Soros, the veteran investor, earlier in the day that China must let its currency appreciate.
“We cannot preach free trade and at the same time tolerate monetary dumping,” Mr Sarkozy said.
He urged developing nations with huge trade and fiscal surpluses to allow their currencies to appreciate and consume a little more while the heavily indebted West slowly reduces consumption and pays down its debt. He went on to urge world leaders to adopt an entirely new financial regulatory system, with a mechanism controlling exchange rates at its heart…
(28 Jan 2010)
Davos 2010: Sarkozy calls for revamp of capitalism
BBC news
“We need deep profound change,” he said in his keynote speech at the World Economic Forum in Davos.
His comments came as bankers and regulators clashed over proposals to break up banks that threaten the whole financial system.
Mr Sarkozy said he wished to restore a “moral dimension” to free trade.
“Were we not to change, we would be showing tremendous irresponsibility,” he told the bankers and politicians that gather annually in the Swiss alpine resort.
Bank reforms
France has supported forcing banks to hold more capital and curbing bonus payments in global negotiations over the past year on how to reform the system to prevent future crises…
(27 Jan 2010)
Sarkozy’s Unpragmatic Vision
Paul Maidment, Forbes
It was hard to tell if the half of French President Nicholas Sarkozy’s audience who didn’t give his Davos 2010 keynote speech a standing ovation stayed seated out of disagreement or bafflement. It was a speech of vision and was more soaring in the French in which it was delivered than in the English into which it was translated (full French text; full English text). But what that vision was was not entirely clear.
“The globalization we had dreamed of at the outset was of the kind where, instead of taking from others by means of monetary, social, fiscal or ecological dumping, each of us would found development on social progress, increased purchasing power, reduced inequality, improved standards of living, health and education. . . . By prioritizing short-term logic, we have paved the way for our entry into a time of scarcity. We have exhausted non-renewable resources, devastated the environment, caused global warming. Sustainable development cannot be achieved if profits up front and dividends for shareholders are our sole criteria.”
One attendee said it was the most socialist speech he had heard from a man who came to office as a right-of-center president promising to inject an entrepreneurial free-market spirit into the French economy. Certainly there were plenty of lines in Sarkozy’s Davos speech to leave free marketers aghast. For one, his view of government’s role in the economy:…
(27 Jan 2010)
The full text of the speech is here.
