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French President Nicolas Sarkozy has warned of political and social unrest unless there is greater regulation of the globalised economy.
He argued that the current system of “speculation and dumping” cannot continue. “We have to overhaul everything,” he said.
He called for a larger role for social institutions in financial regulation.
The president was speaking in Geneva at the invitation of the International Labour Organization (ILO).
“Regulation of globalisation is the central issue,” he argued.
“Either we have reason or we will have revolt. Either we have justice or we will have violence. Either we have reasonable protection or we will have protectionism.
“It is irresponsible to believe that the financial markets can continue to impose their obsession with short-term profit on the entire global economy, and on society,” he added.
Earlier on Monday, the US government outlined plans that will lead to tighter regulation of the biggest financial institutions and a new framework for consumer and investor protection.
The French president’s comments were backed by his Brazilian counterpart Luiz Inacio Lula da Silva, who called for a clampdown on financial speculation and tax havens.
“We cannot afford to live with a financial system that speculates,” Lula said.
“As the leader of a developing country, I hope that a new international order that rewards production and not speculation will emerge from the crisis.”
The ILO itself warned that the current economic downturn will affect the global jobs market for years to come.
“Even if the signs of recovery are confirmed, and even if there is a real recovery by the end of the year or early next year, we will need still several years before the jobs market goes back to the pre-crisis situation,” said Raymond Torres, director of the Institute for Labour Studies at the organisation.
The process normally takes four to five years, he said.