LA-SEYNE-SUR-MER, France, Dec 1 (Reuters) - European industry cannot continue with a euro at such weak levels to the dollar, pointing to the need for changes to the global monetary system, French President Nicolas Sarkozy said on Tuesday.
In a speech on the French economy, Sarkozy called for a system which would diminish the dominant role of the dollar on world markets and said France would seek progress on the issue when it presides over the Group of 20 major developed and developing nations in 2011.
"I see myself as a friend of the Americans but we cannot continue like this, with a euro which has risen by 50 percent of its value in relation to the dollar," he said.
"How do you want us to continue to produce in the euro zone and sell in the dollar zone with a 50 percent deficit in productivity based on the simple value of money? How will our industries be able to cope? This requires a new international monetary system," said Sarkozy.
France has said that the euro at $1.50 was a disaster for Europe, fuelling a broad international debate about imbalances between currencies.
The government has said Sarkozy would propose "a new international monetary organisation which better reflects today's world" to the G20 in 2011, when France holds the G20 presidency.
The dollar has 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.
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. (Reporting by Yann Le Guernigou; Writing by Tamora Vidaillet; editing by Patrick Graham) ((tamora.vidaillet@reuters.com ; + 33 1 4949 5218; Reuters Messaging: tamora.vidaillet.reuters.com@reuters.net ))