The French President is threatening to walk out of the most important economic meeting in many years unless the members adopt his idea of increased financial regulation:
President Sarkozy yesterday threatened to wreck the London summit if France’s demands for tougher financial regulation are not met.
France will not accept a G20 that produces a “false success with language that sounds good but contains no commitments”, his advisers said.
Asked if this meant a possible walk-out, Xavier Musca, Mr Sarkozy’s deputy chief of staff for economic affairs, said: “A basic rule with nuclear deterrence is that you do not say at what point you will use the weapon.”
The French threat dramatically raised the temperature hours before President Obama arrives in London today. If carried through, it would ruin a summit for which Mr Brown and Mr Obama have high ambitions, believing it vital to international recovery.
Mr Sarkozy, who blames the “Anglo-Saxons” for causing the economic crisis, told his ministers last week that he would leave Mr Brown’s summit “if it does not work out”.
Sarkozy wants an international body to oversee the financial industry - an impossibility even for Obama to agree to and a stance not likely to generate much enthusiasm anywhere else. Similarly, France and Germany will throw cold water on Obama's proposal to coordinate stimulus spending across the board.
The ToL article mentions the possibility that Sarkozy is posturing for the folks back home. This is a distinct possibility given Sarkozy's unpopularity with leftists and unions who saw his reforms as an attack on the French welfare state. By standing up to the "Anglo Saxons," Nicky scores some points with that crowd as well as the average Jacques who is distrustful of the British-American axis.
Meanwhile, a report to be released at the summit predicts 10% unemployment for industrialized countries by next year.