22 October 2008  
   
STRASBOURG - French President Nicolas Sarkozy on Tuesday backed the creation of sovereign wealth funds, or state-owned investment funds, in Europe to support industry during the financial crisis.
   
"I'm asking that we think about the possibility of creating, each one of us, sovereign funds and that perhaps they could be coordinated to provide an industrial response to the crisis", he told members of the European Parliament.
   
Sovereign wealth funds are typically controlled by oil-rich countries like Russia or Gulf nations with trillions of dollars to invest abroad.
   
Sovereign wealth funds began in the early 1950s but their use increased in recent years.
   
However, their increase was accompanied by fears in some European countries and Washington that the governments controlling funds could use them to advance their own political and strategic aims.
   
"I am well aware of disagreements among certain countries" on this subject, Sarkozy said, "but I cannot imagine being told that a united European response was needed for the financial crisis, but not for the economic crisis".
   
Sarkozy, whose country holds the European Union's rotating presidency, said it was important for the 27-nation bloc to coordinate economic policy as it responds to the crisis.
   
"Our duty is to ensure that in Europe we can continue to build ships, aircraft, cars", he said.
   
Still, Sarkozy's various proposals for responding to the economic crisis -- some of which he outlined in Strasbourg -- sparked criticism among some EU members Tuesday.
   
Germany's economy minister denounced the French president's call for EU governments to invest in companies and for an "economic government" for the eurozone area.
   

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