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11 Sep 2007

Merkel and Sarkozy Discuss EU Hedge Funds

At an informal meeting yesterday in Meseberg, Germany, French President Sarkozy took a tough line on "financial speculators", such as hedge funds, who should not be allowed "to destroy an entire international system".

He added: "We are in favour of transparency and regulation, and for a capitalism that favours entrepreneurs, not speculators."

Merkel and Sarkozy also discussed issues of common European concern, such as energy, and proposed the creation of a "council of wise men" to debate how the EU should evolve over the next 30 years.

However, the two remained vague on the composition of such a council, but underlined that its members should not be individuals who are actively involved in the Commission, Council or Parliament.Both Merkel and Sarkozy are opposed to Turkish EU membership, supporting a close association instead.

Chancellor Merkel criticised in particular the failure of rating agencies. She asked: "How can we tell people at home that nobody knew anything about this and yet they all have to live with the consequences?"

The two European leaders said that they would push for an EU initiative to improve the transparency of financial markets following the recent turmoil spurred by the US sub-prime market collapse.