Nicolas Sarkozy: US dollar no longer only currency in world
PARIS, Nov 13 (Reuters) - The U.S. dollar can no longer claim to be the only
currency in the world, French President Nicolas Sarkozy said on Thursday ahead
of a Washington meeting of G20 leaders to discuss the international financial
system.
Sarkozy said he would take his message on the dollar to the meeting where
France, which holds the rotating European Union presidency, hopes the leaders
will come up with a concrete plan of changes to prevent a repeat of the global
financial crisis.
'I am leaving tomorrow for Washington to explain that the dollar cannot claim
to be the only currency in the world..., that what was true in 1945 can no
longer be true today,' he said at a prize-giving ceremony.
The U.S. dollar as 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, although the euro runs
a close second.
But the financial crisis has provoked a debate on the international financial
system including the role of the dollar and several countries are keen to
broaden the reserve base.
Economy Minister Christine Lagarde told Reuters on Friday 'the stronger the
euro, the more attractive it will be in many ways.'
But she was wary of a dramatic shift in the composition of currency reserves.
'It should be as gradual as possible because we don't want at this very moment
of high volatility on many markets, a major shift that would clearly induce yet
more difficulties and volatility,' she said.
(Reporting by Emmanuel Jarry; Writing by Anna Willard; Editing by Victoria Main
- Reuters)
