France's PM Pushes Financial Reform Ahead of G-20 Meeting

By Julia Ritchey

Washington
24 March 2009

French Prime Minister François Fillon is in Washington to garner support for tougher international financial regulations ahead of the April 2 Group of 20 economic summit in London. While the Obama administration wants Europe to increase its fiscal stimulus to solve the global economic crisis, the French prime minister says financial reforms must first be addressed.

French Prime Minister François Fillon says it is the duty of the G-20 group of the world's largest developed and emerging economies next month to achieve concrete results in resolving the global economic crisis. He says the best way to do this is by agreeing to stricter oversight of international financial institutions.

In a speech at the Carnegie Endowment for International Peace in Washington on Monday, Mr. Fillon listed four key issues that France wants to top the agenda at the economic summit.

Mr. Fillon said the four pillars for lasting recovery are reforming financial regulations, supporting economic growth, rescuing banks and providing aid to the countries suffering most from the economic crisis.

In addition, he said hedge funds must be subject to real oversight. Ratings agencies, which Mr. Fillon said helped fuel the crisis, must adopt rules for dealing with conflicts of interest and offshore banking centers, which often allow clients to evade paying taxes in their home countries, need to be vigorously regulated.

Mr. Fillon also struck back at critics in the media and within the Obama administration who say Europe needs to spend more on government economic stimulus.

The French prime minister said the crisis was created by an excess of public debt and that it will not be solved by creating even more. He says European Union member states already have implemented large stimulus packages that account for more than three percent of Europe's gross domestic product.

Mr. Fillon expressed confidence in U.S. Treasury Secretary Timothy Geithner's newest initiative to help stabilize the banking system by providing guarantees and low-interest loans to investors willing to purchase toxic assets from banks.

Mr. Fillon said he prefers the idea of a public-private partnership to buy up the bad assets, and that this will prompt European countries to consider similar measures.

While in Washington, Mr. Fillon also met with Vice President Joe Biden and Lawrence Summers, the head of President Barack Obama's National Economic Council.