Sarkozy in pledge on sovereign funds

Nicolas Sarkozy pledged to protect French industry against sovereign wealth funds, the state-backed investment vehicles which won prominence and notoriety in equal measure last year.

The French president called on the government-backed Caisse des Dpôts et Consignations bank to be his country's "instrument" in protecting companies against the "power of extremely aggressive sovereign funds which only follow economic logic".

"France must protect and give them the means to develop and defend themselves. I want the CDC to be the instrument of this policy of defending and promoting the essential economic interests of the nation," he said, faintly echoing the protectionist rhetoric of the former prime minister Dominique de Villepin.

M. Sarkozy's message is in contrast to the one put out by the UK Treasury, which softened its stance on SWFs last month. Kitty Ussher, the Economic Secretary to the Treasury, warned against a "wave of prescriptive regulation" and said that Britain had seen the benefits of sovereign investment ever since the 1950s, when the Kuwait Investment Authority opened an office in London. Ms Ussher added that SWFs, which are now worth $2 trillion to $3 trillion (1trn to 1.5trn) and slated to grow at up to $900bn a year, were still welcome in the capital, citing Dubai International Capital's investment in Travelodge and HSBC, and the Singapore-backed Temasek's investment in Standard Chartered bank.