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Sarkozy calls for more regulation of world economy

Latest update : 2009-06-15

Speaking to a meeting of the International Labour Organisation in Geneva, French President Nicolas Sarkozy stressed the need for more regulation of the world's economy if leaders wanted to stem social unrest.

AFP - The presidents of France and Brazil on Monday sharply criticised the international handling of the financial crisis, calling for sweeping reform and greater global regulation of the world economy.

French President Nicolas Sarkozy advocated a stronger global regulatory role for social institutions like the International Labour Organisation, warning that failure to act could see social unrest and violence.

"Regulation of globalisation is the central issue," Sarkozy told the International Labour Organisation's jobs summit in Geneva.

"World governance of the 20th century cannot be that of the 21st century," he said.

"The ILO must have its word to say with the WTO (World Trade Organisation), the IMF (International Monetary Fund) and the World Bank," he said, advocating a "revolution" that would make the agency's labour standards compulsory.

He blamed a "system of speculation and dumping" and an "obsession" with short term gain for propelling the world towards the financial and economic crisis and undermining social conditions.

"I strongly believe that there will be in the world that is about to emerge (a) demand for reason," the French president said, noting the "considerable cost" the current system had inflicted in terms of job losses and fragile social conditions.

"Either we have reason or we will have revolt. Either we have justice or we will have violence. Either we have reasonable protection or we will have protectionism," Sarkozy warned.

Brazil's President Luiz Inacio Lula da Silva also rounded on the IMF and the World Bank, saying they had been unable to offer "the slightest proposal" to tackle the meltdown while the WTO had failed to reinvigorate global commerce.

Lula called for a clampdown on financial speculation and tax havens, pushing for a fairer and more equitable system to emerge with economic recovery.

"We realise that this crisis demands a tougher attitude from workers, leaders and employers, we cannot live with tax havens," Lula told labour, employer and government representatives from 183 states at the ILO.

"We cannot afford to live with a financial system that speculates," he added.

Earlier, Lula underlined his concerns about the impact of the global economic crisis in a separate speech to the UN Human Rights Council in Geneva.

"As the leader of a developing country, I hope that a new international order that rewards production and not speculation will emerge from the crisis," he told the Council's 47 member states on Monday.

The ILO estimates that the financial and economic crisis could cost between 39 and 59 million jobs from 2007 to the end of 2009.

Lula insisted that the meltdown was triggered by the US subprime or higher-risk home loan crisis and a "speculative financial web without precedent in the history of humanity."

Sarkozy also outlined his vision of greater social justice, calling for economic, financial, social, health and environmental issues to be set on a more equal footing.

Both France and Brazil are members of the Group of 20 major industrialised powers and emerging economies that have coordinated global efforts in recent months to prop up the financial system.

ILO Director General Juan Somavia opened the meeting with an appeal for for urgent measures to save jobs.

"The world cannot afford to wait for employment to come back, several years after economic growth has returned," he told the summit.

The UN's labour agency, a tripartite organisation grouping governments, labour leaders and employers, sets and oversees largely voluntary international social standards.

It has rarely had much political weight alongside the top international economic institutions or various groups headed by the industrialised economies.


Date created : 2009-06-15