By Agency Reporter

Monday, 25 Oct 2010

 

Montreux: French President, Nicolas Sarkozy, warned on Saturday that currency instability threatened world growth and called for coordinated action to reform the world financial system.

Sarkozy, whose country takes on the G20 presidency next month, also denounced speculators as causing volatile prices in commodity markets, cheating producer countries of revenues, Reuters reported on Saturday.

His comments came as Group of 20 finance leaders struck a deal on Saturday to refrain from competitive currency devaluations although they failed to agree firmer language that might have shored up the United States dollar.

”Who doubts today that the currency instability poses a serious threat to world growth?” Sarkozy said, in a speech aimed at gaining support from some 70 heads of state from Francophone countries for his G20 priorities.

”Are we going to continue to reproach and accuse each other and denounce unilateral attitudes while not being capable of defining a multilateral system? We will all get out of this together or we will all fail together,” he said.

He was speaking to a weekend summit of some 70 heads of state from French-speaking countries being held in the Swiss lakeside resort town of Montreux.

The Bretton Woods system, set up in 1945, no longer functioned, he said. ”We must have the courage to imagine together, through coordination, how we can create the basis for a new international monetary system.”

Referring to the 2008 food crisis in some countries, due to spiraling prices, and hikes in oil and gas prices, Sarkozy blamed speculators for disrupting commodity markets saying: ”It is not the law of the market, it is the law of speculation.”

Producer countries had lost billions of dollars through such opaque practices, he said, winning applause from African and Asian delegations in the audience.”This situation cannot continue,” he declared.

Source: Punch