Sarkozy spells out ambitious G20 agenda focusing on commodities prices

At a press conference Monday to lay out France’s goals as the holder of the G20 and G8 presidencies, French President Nicolas Sarkozy said the international community had to focus on regulating commodity markets to ensure food prices stability.

By FRANCE 24 (with wires) (text)

At a keynote speech Monday to spell out France’s goals as the holder of the G20 and G8 presidencies, French President Nicolas Sarkozy laid out an ambitious agenda to reform the international financial system, address imbalances in global economic governance and regulate commodities markets.

Speaking to about 300 journalists and diplomats at the Elysee presidential palace in Paris Monday, Sarkozy unveiled his plan for what he called a “collective presidency” to tackle the world’s most pressing problems.

While identifying financial reform and the imbalance of power in global economic governance as the main challenges of France’s presidency, Sarkozy called for a broadening of the role of the International Monetary Fund (IMF).

"We propose to the G20 to develop a code of conduct for managing capital flows and ultimately France's conviction is that a reform of the IMF's statutes is desirable," said Sarkozy.

In an attempt to address the stark imbalances in the world financial system, Sarkozy proposed that the IMF should increase its surveillance of international capital flows based on a new code of conduct that should be developed by the G20.

‘A moral and ethical tax’

Stressing the need for “innovative solutions” to tackle the financial crisis, Sarkozy stressed that France favours a financial tax to dissuade speculation while creating a resource for future development.

But while highlighting his proposition as “a moral and ethical” tax, Sarkozy acknowledged that there were many opponents of such a tax. The goal, he maintained, was to collectively come up with “innovative solutions to tackle this problem”.

Sarkozy has long called for the reform of the post-World War II global monetary system, which relies heavily on the US dollar. But in a tacit acknowledgment of the resistance he faces from Washington, Sarkozy reiterated that “France does not wish to call the role of the dollar into question.” He however attacked the accumulation of foreign exchange reserves by some countries as “expensive” and unproductive.

During his nearly 40-minute speech Monday morning, which was followed by an extensive question-and-answer session, Sarkozy shifted the focus of France’s G20 and G8 presidencies to tackling commodity markets.

"We want regulation of primary commodity financial markets,” stressed Sarkozy. “How can you explain that we regulate money markets and not commodities? We must improve transparency on physical markets. We must be able to know the outlook of stocks."

Food and commodity prices have dominated global agendas following the recent uprising in Tunisia, which was sparked by increasing prices coupled with high unemployment.

"Shortage fuels speculation and speculation fuels shortage," said Sarkozy. “"There's no market without rules. This is a truly key issue," he said.