President Nicolas Sarkozy on Thursday claimed credit for “immense” progress towards tighter financial regulation at the G20 summit, saying the agreed reforms “turned the page” on a dominant model of Anglo-Saxon capitalism.
The French leader refused to wait for Gordon Brown, the UK prime minister and summit host, to conclude his closing press conference and rushed to tell the French media that his objectives had been met and even surpassed. “To tell the truth, it is more than we could have imagined,” he said.
Angela Merkel, the German chancellor, who joined her French counterpart on Wednesday in laying down demands for a regulatory clampdown, struck a more conciliatory note. The meeting had found “a very good, almost historic compromise in a unique crisis,” Ms Merkel said. “This time the world does not react as in the 1930s.”
With the G20 agreeing to implement new rules on hedge funds, bank traders’ pay, rating agencies, bank capital requirements, securitisation, the blacklisting of tax havens and a review of accounting rules, both leaders can argue that their demands were largely met – although there will be long arguments over the detail in the months ahead.
One obvious exception is the G20 decision to simply “take note” of a blacklist of tax havens drawn up by the the Organisation for Economic Co-operation and Development, while finance ministers draw up a list of sanctions, which does not go as far as the French leader wanted.
In France as in Germany, tax havens are hugely controversial and decisive action against them became a litmus test of the G20’s ambition.
Mr Sarkozy argued that if he and Ms Merkel had not issued their utlimatums – backed up by the French president’s apparent threat to walk away if not satisfied – their demands would not have been met “spontaneously”.
French officials admit privately that this was bluster because the G20 countries had already agreed to nearly all of the Franco-German demands beforehand.
Nevertheless, Mr Sarkozy could expect congratulation on his return to France. Some French media outlets were commending his tactics, suggesting they had yielded big last-minute concessions.
Meanwhile, Ms Merkel’s unusually pushy performance is likely to win her favour among German voters many of whom are suspicious of Anglo-Saxon capitalism and who go to the polls in September in what is expected to be a tight race.
Le Figaro, the pro-government French daily, suggested that the G20 had provided a spark to jump-start the troubled Franco-German motor driving the European Union.
There is no doubt that the two countries worked closely together to push for new financial regulations to tame the excesses of an Anglo-Saxon model they have long criticised. But it is too early to say whether the motor will splutter back into life, given the many other points of difference between them.
The French media have also began to ask whether Mr Sarkozy’s posturing in the run-up to the summit has caused collateral damage, not least in his relationship with Barack Obama, the US president.
Mr Sarkozy may feel that standing up to the US will play well in France, especially the day before he announces his country’s return to Nato’s military command, seen by the French as a pro-American gesture. But it may not go down well in the White House.
Martine Aubry, leader of France’s opposition socialists, attacked Mr Sarkozy for not listening to Mr Obama on the need for further action to stimulate the economy.
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