Albion
01-11-2011, 08:35 PM
French President Nicolas Sarkozy visited his US counterpart Barack Obama on Monday. The world economy was high on the agenda - including Sarkozy's aim of reducing the influence of the US dollar.
France is hosting this year's G8 and G20 summits, and French President Nicolas Sarkozy has started to campaign for a change to the way the US dollar plays a central role in the global economy.
In his New Year's Eve address to his country, Sarkozy said France would look to change a system which no longer reflects our modern global society.
"The system put in place in 1945 is for a world that doesn't exist anymore," the French president told the nation.
He suggested that the current model which uses the US dollar as the primary reserve currency was "unstable" and "makes part of the world dependent on American monetary policy."
Sarkozy's plan is to update everything to what he regards as the new reality of a more multi-polar world and the rise of new powers like India, Brazil and China.
'Dangerous' to rely on dollar
Sarkozy is not the only Frenchman who wants to reduce the world's reliance on the dollar. Philippe Dessertine from Paris' High Finance Institute recently described using the dollar as the only reserve currency as "very dangerous."
Recent actions by the US Federal Reserve to stimulate the economy through quantative easing – where dollars are printed to buy US government bonds in order to increase the money supply – have been criticized internationally.
"The Federal Reserve's latest actions favor the US but have consequences for the rest of the world," Dessertine said. "Emerging countries and Europe really want to change that."
Devalued dollars flood developing countries, which push their currencies up, quashing their exports and potential for job creation.
Full story... (http://www.dw-world.de/dw/article/0,,14760921,00.html)
France is hosting this year's G8 and G20 summits, and French President Nicolas Sarkozy has started to campaign for a change to the way the US dollar plays a central role in the global economy.
In his New Year's Eve address to his country, Sarkozy said France would look to change a system which no longer reflects our modern global society.
"The system put in place in 1945 is for a world that doesn't exist anymore," the French president told the nation.
He suggested that the current model which uses the US dollar as the primary reserve currency was "unstable" and "makes part of the world dependent on American monetary policy."
Sarkozy's plan is to update everything to what he regards as the new reality of a more multi-polar world and the rise of new powers like India, Brazil and China.
'Dangerous' to rely on dollar
Sarkozy is not the only Frenchman who wants to reduce the world's reliance on the dollar. Philippe Dessertine from Paris' High Finance Institute recently described using the dollar as the only reserve currency as "very dangerous."
Recent actions by the US Federal Reserve to stimulate the economy through quantative easing – where dollars are printed to buy US government bonds in order to increase the money supply – have been criticized internationally.
"The Federal Reserve's latest actions favor the US but have consequences for the rest of the world," Dessertine said. "Emerging countries and Europe really want to change that."
Devalued dollars flood developing countries, which push their currencies up, quashing their exports and potential for job creation.
Full story... (http://www.dw-world.de/dw/article/0,,14760921,00.html)