French President Nicolas Sarkozy said on Saturday that he wanted to work with Russia to give developing nations a larger say in how to regulate the global economy.
Global financial institutions such as the World Bank and IMF — created at the Bretton Woods conference in New Hampshire 1944 — are outdated and must be replaced, Sarkozy told an economic forum in St. Petersburg hosted by Russian President Dmitry Medvedev.
“We all need to think about the foundations for a new international financial system. We’ve been based on the Bretton Woods institutions of 1945, when our American friends were the only superpower,’’ Sarkozy said.
“My question is: Are we still in 1945? The answer here is, ‘no,’” he said.
Sarkozy said the UN has too many members to reach consensus on how to reform the global financial system, while the G8, which includes the world’s eight wealthiest nations, pays too little attention to developing countries.
“Who can seriously address the big problems of the world without asking the opinions of China, India, Brazil, Mexico?’’ Sarkozy asked.
He said the most effective platform is the G20, a group of 20 wealthy and developing nations.
The French president pledged to work with Russia during this week’s session of the G20 in Canada to address some of the most urgent issues that have emerged from the global financial crisis, such as restricting offshore financial zones and abolishing the “law of the jungle” that he says governs the global economy.
Sarkozy also said the G20 “should think together about a new international currency system,’’ but he did not elaborate.
Medvedev went further, stressing the need for more reserve currencies besides just the euro and the US dollar.
“We are making plans for the future. We are talking about creating other reserve currencies, and we are counting on other countries to understand this. Even the use of two currencies as strong as the euro and [US] dollar will not insure the world against problems,’’ Medvedev said.
John Lipsky, the deputy managing director of the IMF, supported broadening the list of reserve currencies.
“Making, for example, the ruble an international reserve currency implies lots of strengthening of the institutions, deepening of the markets. It’s a very good and plausible goal,’’ Lipsky said.
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