Sarkozy: EU is in charge of City of London

FRENCH President Nicolas Sarkozy yesterday gloated over the nomination of a French EU Internal Market Commissioner, saying it would help European economic ideals prevail over Britain&rsquo;s current system.<br /><br />Hailing the appointment of Michel Barnier, a former agriculture minister in his government, Sarkozy blamed the Anglo-Saxon model for the global economic downturn and crowed: &ldquo;Do you know what it means for me to see for the first time in 50 years a French European commissioner in charge of the internal market, including financial services, including the City?&rdquo;<br /><br />&ldquo;I want the world to see the victory of the European model, which has nothing to do with the excesses of financial capitalism,&rdquo; he added.<br /><br />Sarkozy&rsquo;s comments will add to concerns that European Union plans to overhaul financial regulation will go too far. The plans could leave the British taxpayer at serious risk, a senior MP warned last night.<br /><br />Michael Fallon, the Conservative deputy chairman of the Treasury Select Committee, said proposals to hand powers to a new Europe-wide regulator were &ldquo;legally questionable&rdquo; and needed to be &ldquo;drastically scaled down&rdquo;.<br /><br />The EU&rsquo;s 27 finance ministers are due to meet today at Ecofin to talk over measures to reform the financial system. Key issues are the creation of a European Systemic Risk Board, which would be given a wide scope to monitor stability, and three smaller regulators.<br /><br />There are worries London could be forced to pump public funds into a European institution in an emergency scenario.<br /><br />Fallon told City A.M: &ldquo;These proposals need to be drastically scaled down to give much tougher protection for the British taxpayer. Otherwise a European authority could at some point take a decision that ends up being very costly indeed.&rdquo;