Sarkozy looks to close gap with Germany over financial overhaul

BEIJING: French President Nicolas Sarkozy has been using a summit of Asian and European leaders in Beijing to try to close the gap with Germany over his plans to dig the world out of its financial crisis.

Sarkozy, whose country holds the rotating presidency of the European Union, discussed his plans to create an "economic government" for the 15-nation eurozone with German Chancellor Angela Merkel yesterday, French officials said.

Sarkozy, who has mooted the idea of overhauling the global financial system in place since the end of World War II, wants Europe to follow France's model of greater state intervention to protect its economy from the current turmoil.

Germany, the world's third largest economy, has voiced opposition to much of Sarkozy's plan, which he is pushing ahead of crisis talks in Washington on November 15 between the world's richest nations and largest emerging economies.

"The alliance of France and Germany is essential. That doesn't mean that we have to agree, even before having a debate, on everything," a French official said on the sidelines of the Asia-Europe Meeting (ASEM) in Beijing.

The French side have also downplayed German opposition to Sarkozy's proposals to create sovereign wealth funds to protect strategic parts of their economies, the French official said, asking not to be named.

Sarkozy announced the creation of a French fund on Thursday, promising to protect key French firms threatened by the financial crisis and saying that the current economic difficulties had killed off the "dictatorship of the market."

"It would be good if other European countries (created sovereign wealth funds) too and that we coordinated," the French official said. "But it's not obligatory... it's no big deal if Germany doesn't do it."