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Sarkozy’s New Sugar Daddy: Qatar

With Francois Hollande’s government languishing in the polls, former French President Nicholas Sarkozy is facing a dilemma. Should he capitalize on Hollande’s struggles and prepare for a comeback in politics, or should he go into private enterprise to make his millions? A Financial Times report suggests that Sarkozy stands to make millions by leveraging his connections into a cushy job in finance, but he is wary of taking the leap for fear it could hurt his political future:

The proposal was to set up a private equity fund backed by the Qatar Investment Authority, the $100bn sovereign wealth fund, that would invest in “European reconstruction” – companies in continental Europe, with a particular emphasis on Spain. […]

The project looked promising: Mr Sarkozy had received a letter of intent from the QIA to commit €250m to the private equity fund, according to four people with knowledge of the pledge. It even had a mooted name, Columbia Investments. It would have an office in London in which the former president would visit one or two days a week, according to a person familiar with the matter. Mr Sarkozy held talks with at least one investment executive to join the firm as his other partner in the British capital, according to three people familiar with the matter.

In sum, if politics doesn’t work out for Sarkozy, a coalition including Qatar and senior French business leaders will pay him 3 million euros per year to manage investments.

Nice work if you can get it.

Sarkozy wouldn’t be the only ex-European leader to find a sugar daddy after leaving office. Former German Chancellor Gerhard Schroeder went to Putin and got a big Gazprom payoff once his term ended.

Both cases should serve as a reminder that the European political class is heavily influenced by forces outside Europe. Qatar was a big backer of Sarkozy’s push to overthrow Gaddafi in Libya, and it also has many ties with France in the struggle to push Iranian influence out of Lebanon and Syria.

Indeed, the influence of the “Arab Lobby” in both London and Paris is much greater than many Americans understand. The very large pools of liquid capital coming from the Gulf are the lifeblood of the London financial industry, and the Arab countries are vital customers and partners for the French business establishment, which is itself closely aligned with and linked to to the French state.

One of the characteristic failings of American journalism is the naive quality of American reporting about the political and economic influences that shape policy in many other countries. Understanding the ways that countries like Saudi Arabia, Bahrain, Kuwait and Qatar influence policy in Britain and France—but have much less pull in Berlin—helps us see why Franco-British policy so often diverges from what Berlin would like to do.

The American press (and, sadly, much of our foreign policy establishment) often reads this in absurdly naive, ideological terms. But remembering that Britain and France want to please the Gulf Arabs is a key to understanding who these people are and what they are up to.

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  • John Burke

    Important post on a much ignored topic. Back in the 70s, I worked at a major US money center bank that was a leader in what was then a new business, “recycling petrodollars.” In the period that began with the 1973 oil embargo through the early 80s, something like $500 billion of these dollars (roughly $1.5 trillion today), about 90% from the Middle East, flowed through international banks which at first invested the dough mainly in Europe but later, as the pickings got slim there, increasingly in developing countries (who naturally took the money and complained about neocolonialism). This torrent of dollars, not surprisingly, had an effect on US (and European) policies (not to be conspiratorial about it but at the personal level, this had a lot to do with both the Shah and post-1973 Sadat’s being adopted as among David Rockefeller’s best friends).

    I don’t know how the recycling went in the later 80s and 90s, but it certainly continued. By the 2000s, though, most of the money was flowing directly into asset purchases, whether on the exchanges or through partnerships with European, US, Chinese or other foreign companies. I looked up some fairly recent stats and found that in 2007, the total available for investment from the OPEC countries was about $1 trillion, of which $600 billion was from the Middle East.

    Anyway you look at it, that much dough will get you a lot of friends and allies — even successfully tempt public figures like Sakozy and let’s not forget, Al Gore, and even Bill Clinton who has collected millions in “speaker fees” from the Gulf over the past dozen years.

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