A Very Interesting Development - France Goes Protectionist

President Nicolas Sarkozy on Thursday earmarked €20bn ($24bn) for a new state investment fund to protect France’s strategic industrial assets from the credit crunch or foreign takeover.

The new fund – to be managed by Caisse des Dépôts, the state-backed finance house – would be among the 20 largest long-term investments funds in the world, Mr Sarkozy said.

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But, only €6bn ($8bn, £5bn) of the €20bn will be in cash for immediate investments, the rest being largely publicly held shareholdings that are unlikely to be sold in the short or medium term.

Mr Sarkozy said the new fund would have two functions: help companies that could not find finance for their investments because banks were too “timid” and safeguard the capital of “strategic businesses”.

“The day we stop building trains, aircraft, cars and ships, what is left of the French economy?” the president said in a speech in Montrichard, in the Loire valley. “I will not turn France into a reserve for tourists.”