28 Jan 2011

Staunch defence of euro promised by Sarkozy

8:08 pm on 28 January 2011

President Nicolas Sarkozy has vowed France and Germany will never let the euro fail.

At the World Economic Forum at the Swiss resort of Davos, he acknowledged concerns about the future of the euro following bail-outs of Greece and the Irish Republic.

"Whether it be [German] Chancellor Merkel or myself, never will we turn our backs on the euro. Never will we abandon the euro," he said.

He added that those who bet against the euro should watch out for their money.

"The euro spells Europe. The euro is Europe and Europe has spelled 60 years of peace on our continent, therefore we will never let the euro go or be destroyed," he insisted.

France currently holds the presidency of the G20 group. The president said he was not trying to weaken the US currency.

"The dollar will continue to be the world's number one currency," he said.

The BBC reports Mr Sarkozy also called for the mandate of the International Monetary Fund to be expanded to measure and enforce new rules on global economic imbalances.

He said the G20 should develop a set of indicators to define and measure imbalances on issues including currencies, trade and current accounts.

"I think it's worthwhile rethinking the IMF statutes to make it the organisation in charge of economic, financial and monetary policy co-ordination, and of enforcing the indicators."

As G20 president, Mr Sarkozy is keen to negotiate a deal on currency reform during his tenure.

Rising food prices

World leaders at the forum have warned rising food prices could lead to social unrest and even economic war.

Some have called for regulation to rein in speculation and volatility in prices.

But business leaders in Davos rejected their calls for curbs on commodity speculation.