By common consent, Nicolas Sarkozy has had, for the most part, a good financial crisis. But he slipped up this week when he suggested European Union member-states should create their own sovereign wealth funds to invest in European companies and stop foreigners from buying up “strategic assets” on the cheap.
This proposal was flawed on so many counts that it is hard to know where to begin. But here we go. First, there is no evidence that non-European sovereign wealth funds are trying to seize control of strategic or even non-strategic European assets, least of all by means of hostile takeovers. Dark hints to the contrary do nothing but harm the EU’s relations with the countries where the funds are based. In fact, they risk deterring the funds from making benign investments in Europe.