France announces sovereign wealth fund to protect champions

ANNECY, October 23, 2008 (AFP) – President Nicolas Sarkozy announced the creation of a French sovereign wealth fund on Thursday, promising to protect the strategic heights of the economy from the global financial storm. Declaring that the recent turmoil had killed off the “dictatorship of the market”, Sarkozy vowed to lead Europe towards a model in which the state will take more active role in industry and protect firms from foreign takeover.

“A better world will emerge from this crisis than the one we had before,” he said, adding that the fund would “intervene massively” in order to protect any strategically important French firms threatened by the global credit crunch.

“What oil producers do, what China does, what Russia does, there’s no reason that France should not do, in the service of an industrial policy worthy of the name,” he said, vowing to promote innovation and capital investment.

Sarkozy was clear that he wanted Europe as a whole to follow the French example, but the continent’s biggest economy Germany quickly rejected the idea.

“The German government believes that apart from the areas of public safety and order … greater protection measures are not needed in Germany,” German