Sarkozy calls for a “new Bretton Woods”

French President Nicolas Sarkozy has called for ''a new Bretton Woods'' and a re-examination of the fairness of globalisation and capitalism if the economic imbalances that are at the root of the problem are not addressed.

In his opening address at the World Economic Forum annual meeting yesterday, Sarkozy said that it will not be possible to emerge from the global economic crisis and protect against future crises if the economic imbalances that are at the root of the problem are not addressed.

''Countries with trade surpluses must consume more and improve the living standards and social protection of their citizens,'' he said. ''Countries with deficits must make an effort to consume a little less and repay their debts.''

The world's currency regime is central to the issue, Sarkozy argued. Exchange rate instability and the under-valuation of certain currencies lead to unfair trade and competition, he said. ''The prosperity of the post-war era owed a great deal to Bretton Woods, to its rules and its institutions. That is exactly what we need today; we need a new Bretton Woods.''

Sarkozy said that France would place the reform of the international monetary system on the agenda when it chairs the G8 and G20 next year.

In his address, Sarkozy also called for an examination of the nature of globalisation and capitalism. ''This is not a crisis in globalisation, this is a crisis of globalisation,'' he said.