January 7, 2010 / 10:51 AM / 10 years ago

UPDATE 1-Sarkozy says world currency disorder unacceptable

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PARIS, Jan 7 (Reuters) - Disorder among world currencies has become unacceptable and France intends to make it a major subject of its presidency of the G8 and G20 in 2011, President Nicolas Sarkozy said on Thursday.

France has been at the forefront of European complaints about the strength of the euro against other currencies.

It is the second time in as many days that Sarkozy has called for currency issues to be at the centre of international economic discussions.

“The monetary disorder in the world has become unacceptable,” he said in a speech to an economic conference.

“Currency disorder is a major issue that France will bring up when it presides at the G8 and the G20 in 2011. There cannot be financial, economic and social order until we put an end to currency disorder.”

France has said that the euro at $1.50 is a disaster for Europe, fuelling a broad international debate about imbalances between currencies. For a Reuters poll on foreign exchange rates, see [ID:nRPODHwpp]

“European companies will not gain competitiveness when the dollar is losing 50 percent of its value,” Sarkozy said.

The dollar has been the lynchpin of the world financial system since 1944 when the Bretton Woods conference agreed on a pegged exchange rate system with the dollar as the effective reserve currency.

Although this collapsed in 1971, when the dollar stopped being convertible into gold and gave way to the currency model of freely floating currencies, the dollar has remained the favoured international currency.

Sarkozy repeated his call for a monetary system that relied less on the dollar.

“The world has become multi-polar, we need a multi-monetary system,” he said. (Reporting by Anna Willard and Sophie Taylor; editing by Stephen Nisbet)

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