Basically wrong

9 January 2008 By Pierre Briancon

The French president wants to use Caisse des Depots, the stateowned bank, to defend French companies against foreign takeovers. This barelydisguised, defeatist protectionism will mostly hurt French companies and their shareholders.

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Nicolas Sarkozy, the French president, Tuesday warned that he will not "stand by without reacting" to the increasing influence of "extremely aggressive speculative funds and sovereign funds that don't obey to strictly economic criteria", and called on stateowned bank Caisse des Depots to be the instrument of choice to "protect" French companies.

In his first press conference since he became president last May, Sarkozy insisted that "France must protect its companies, and give them means to defend themselves and to develop". He also reiterated his previous calls for a "moralisation" of capitalism, saying he would propose steps to other European Union members when France takes over the EU presidency in the second half of the year.

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