Financial markets need rules to ensure competition is truly fair, French President Nicolas Sarkozy said Thursday, demanding reciprocity from sovereign wealth funds and questioning the high price of oil and the euro.
After lavishing praise on the British economic model, which he said France would do well to emulate, the president lectured an audience of financial leaders at London's ornate Guildhall on the evils of unfettered markets.
"Competition and freedom can withstand a certain amount of regulation," he said through a translator. "The absence of laws doesn't spell freedom; it's the jungle. It's not fair competition, it's unfair competition."
He said tough environmental regulations in his country would be useless if France opened its market to nations where such regulations weren't respected. He also said that while he welcomed investment from sovereign wealth funds, the countries which managed them needed to make their own markets friendlier to foreign capital.
"I demand reciprocity," he said, asking rhetorically whether foreigners in China were truly allowed to invest in any company they chose.
Sarkozy questioned what he called distortions in the international commodity and currency markets, saying he was "deeply, deeply concerned" by the rise in raw material and oil prices. He also said strong currencies were only appropriate for strong economies, arguing that European growth did not justify the euro's record highs and that the currency's price was untenable.
Referring to the credit crisis roiling world markets, Sarkozy criticized international rating agencies and said it didn't make sense for financial institutions to earn money simply by shuffling around mountains of debt. He called the phenomenon a "perversion of our ideas and values."
© Business week
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