Alluding to recent calls to revamp the global monetary system to reduce
the dominant role of the dollar, Sarkozy said that disparities between
the two currencies posed a “considerable problem.”
The
prospect that companies might consider relocating some of their
industrial activity to regions reliant on the dollar could not be ruled
out, he said during a visit to a plant of defence electronics group
Thales.
“I will bring up this problem of
monetary disparities all through the year,” he said in a New Year’s
speech to workers and business leaders in western France.
“If
you’re producing in the euro zone and selling in the dollar zone, with
a dollar that’s falling and a euro that’s rising, how are you supposed
to make up for this deficit in competitiveness?”
This question needed to sit “at the centre of international debates,” he said.
France
has said that the euro at $1.50 was a disaster for Europe, fuelling a
broad international debate about imbalances between currencies.
The
government has said Sarkozy would propose “a new international monetary
organisation which better reflects today’s world” to the G20 in 2011,
when France holds the G20 presidency.
Promoting industry
The
dollar has been the lynchpin of the world financial system since 1944
when the Bretton Woods conference agreed on a pegged exchange rate
system with the dollar as the effective reserve currency.
Although
this collapsed in 1971, when the dollar stopped being convertible into
gold and gave way to the currency model of freely floating currencies,
the dollar has remained the favoured international currency.
In
a wide-ranging speech, Sarkozy also said government policies were
protecting domestic industry in the wake of the global economic crisis
to ensure that the country remained competitive.
A commitment
to invest some €60bn, through funding generated by both the state and
private sectors, in strategic sectors would help the euro zone’s
second-biggest economy remain competitive globally, he said.
Sarkozy
has previously said that the cash will be used to improve higher
education, training, research and in cutting-edge economic sectors.
“Even
if we hadn’t had the crisis, we would have had to invest in the
potential of our universities and our research apparatus, in our
industry,” he said.
“How do you want France to remain a big
world power if we don’t have the best universities, if we don’t give
our laboratories the means to find the medicine and technology of
tomorrow,” said Sarkozy.
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