Paris - The French government will establish an investment fund to support the country's strategic enterprises affected by the economic crisis, President Nicolas Sarkozy said on Thursday in the city of Annecy. The fund will make available loans to struggling companies in exchange for shares, which will be sold, presumably at a profit, once the company has stabilized.
The aim of the fund, Sarkozy said, will be to protect strategic companies "from predators looking to profit from a firm's undervaluation" to take control of it.
"This will be a powerful tool of industrial policy," the French president said.
Sarkozy urged other European countries to create their own national industrial funds so that industrial policy on the continent can be "coordinated."
"The economic slowdown has begun," he warned. "We must respond."
The French president also announced the suspension of a trade tax for all new business investments beginning Thursday and running until the end of 2009.
The central government will compensate for losses to local governments to which the tax is paid. The daily Le Monde reported on its online edition that this amounts to about 1 billion euros (1.29 billion dollars) a year.
In addition, Sarkozy announced the creation of the post of credit mediator, whose function will be to facilitate an enterprise's access to bank loans.
"I want all companies that have credit problems with banks to be able to call the mediator," Sarkozy said.
During his address, Sarkozy renewed his call for a European "economic government" within the framework of the euro-zone countries, a proposal he first made Tuesday at the EU Parliament in Strasbourg.
Le Monde had reported on Wednesday that the French president envisioned himself as remaining in control of European economic policy for at least another year as head of the eurogroup.
"Europe needs a trade policy, Europe needs an industrial policy, Europe needs an economic policy," Sarkozy said.
In justifying his statist economic policies, Sarkozy said that, in view of the global finance crisis, "to continue with the same ideas, attitudes and practices as before would be fatal."
The crisis, he said, "is the veritable beginning of the 21st century, when everyone realized it was time to begin anew... with new principles and new rules."
