Europe doesn’t need sovereign wealth funds

French President Nicholas Sarkozy has proposed that European nations create sovereign wealth funds to protect national companies from foreign 'predators.' This column says that idea is protectionist and without merit. Emerging economies establish sovereign wealth funds to invest foreign reserves or commodity revenue – not to bail out domestic firms and stifle global competition.

VoxEU.org is a policy portal set up by the Centre for Economic Policy Research in conjunction with a consortium of national sites, including the Italian site LaVoce, the French site Telos and the Spanish site Sociedad Abierta. Vox aims to promote research-based policy analysis and commentary by leading scholars. The intended audience is economists in governments, international organisations, academia and the private sector as well as journalists specializing in economics, finance and business.