French leader says markets neared catastrophe
09/26/2008 | 03:42 AM
PARIS - French President Nicolas Sarkozy said Thursday the world came within "a whisker of catastrophe" during the recent financial crisis and that those responsible for the crisis must be identified and held accountable.
In his first major public address since the start of the crisis, Sarkozy also criticized "abuses and scandals" involving executive pay, and pledged to intervene to halt these practices unless executives come up with their own solution.
"Self-regulation as a way of solving all problems is finished. Laissez-faire is finished. The all-powerful market that always knows best is finished," Sarkozy said.
"The world came within a whisker of catastrophe. We can't run the risk of it happening again," Sarkozy, a conservative, said in an address in the southern Mediterranean port city of Toulon.
Sarkozy warned that the ongoing crisis "will have consequences in the coming months on growth, on unemployment and on spending power."
"The crisis is not finished ... its consequences will be lasting," Sarkozy said.
The president said the crisis made it necessary to accelerate his labor and fiscal reforms, to improve France's competitiveness and help small businesses. He said the ranks of the country's huge corps of civil servants would be shaved by 30,600 next year, not replaced as they retire.
Speaking a day before the French government presents its 2009 budget to Parliament, Sarkozy promised not to impose an "austerity plan" that would, according to him, "deepen the recession."
France's economy shrank by 0.3 percent in the second quarter, but French government ministers including Prime Minister Francois Fillon and Finance Minister Christine Lagarde have denied the country was in recession, saying it was only a slowdown.
In a wide-ranging speech that touched on both the global economy and France's domestic economy, the president said, "We must identify those responsible for this disaster and they must be punished, at least financially."
Saying there had been "too many abuses and scandals" involving executive pay, Sarkozy warned business leaders that "either they agree on acceptable practices, or the government will regulate it before the end of the year."
The president said executives' pay "should be indexed to the real economic performance" of their companies.
Executive pay has emerged as a hot button issue in the crisis, with the U.S. Congress forcing the administration to accept limits on Wall Street pay packages as part of its proposed US$700 billion bailout of the American banking system. - AP
In his first major public address since the start of the crisis, Sarkozy also criticized "abuses and scandals" involving executive pay, and pledged to intervene to halt these practices unless executives come up with their own solution.
"Self-regulation as a way of solving all problems is finished. Laissez-faire is finished. The all-powerful market that always knows best is finished," Sarkozy said.
"The world came within a whisker of catastrophe. We can't run the risk of it happening again," Sarkozy, a conservative, said in an address in the southern Mediterranean port city of Toulon.
Sarkozy warned that the ongoing crisis "will have consequences in the coming months on growth, on unemployment and on spending power."
"The crisis is not finished ... its consequences will be lasting," Sarkozy said.
The president said the crisis made it necessary to accelerate his labor and fiscal reforms, to improve France's competitiveness and help small businesses. He said the ranks of the country's huge corps of civil servants would be shaved by 30,600 next year, not replaced as they retire.
Speaking a day before the French government presents its 2009 budget to Parliament, Sarkozy promised not to impose an "austerity plan" that would, according to him, "deepen the recession."
France's economy shrank by 0.3 percent in the second quarter, but French government ministers including Prime Minister Francois Fillon and Finance Minister Christine Lagarde have denied the country was in recession, saying it was only a slowdown.
In a wide-ranging speech that touched on both the global economy and France's domestic economy, the president said, "We must identify those responsible for this disaster and they must be punished, at least financially."
Saying there had been "too many abuses and scandals" involving executive pay, Sarkozy warned business leaders that "either they agree on acceptable practices, or the government will regulate it before the end of the year."
The president said executives' pay "should be indexed to the real economic performance" of their companies.
Executive pay has emerged as a hot button issue in the crisis, with the U.S. Congress forcing the administration to accept limits on Wall Street pay packages as part of its proposed US$700 billion bailout of the American banking system. - AP
