MercoPress. South Atlantic News Agency

“Laissez-faire is finished” says EC chair Pte Sarkozy

The economic turmoil provoked by crises in the United States subprime and finance markets has put an end to the free market economy, French President Nicolas Sarkozy said on Thursday.

"Laissez-faire is finished, the all-powerful market that is always right, that's finished," Sarkozy said in a widely anticipated speech, his first in France on the economic crisis. As a result, it is "necessary to rebuild the entire global financial and monetary system from the bottom up, the way it was done at Bretton Woods after World War II" Sarkozy said. In July 1944, an agreement was signed in Bretton Woods, New Hampshire that established new rules for commercial and financial relations among the world's major industrial states including the creation of the IMF and World Bank. Banks must be regulated, Sarkozy said, "to regulate the system.... The crisis must lead to a wide-ranging restructuring of the entire global banking system". "We can't continue managing the 21st century economy with instruments from the 20th century". "A certain idea about globalization is coming to an end with the end of the financial capitalism which had imposed their logic over the whole economy and contributed to pervert it" said the French president. Sarkozy called on G8 leaders to meet before the end of the year to outline a new financial system adding it was essential to review monetary and exchange rate policies, insisting that both the Chinese Yuan and US dollar "were undervalued". The French president also called on the European Union to begin a "reflection" on a new monetary policy, an indirect criticism of the anti-inflationary policy carried out by the European Central Bank. "If (the EU) wants to have the means to emerge strengthened, not weakened, from the current crisis, it must carry out a collective reflection about its doctrine of competition, on the instruments of its economic policies, on the aims of its monetary policy" With France currently holding the rotating presidency of the EU, Sarkozy said he would "propose initiatives" on these issues at the next EU summit, on October 15. Finally he warned bankers and corporations CEO to contain their payment agreements, because if they don't agree on self regulation or set of standards, he would send a bill to parliament regulating the issue.