French President Nicolas Sarkozy has called for a partial government takeover of strategically important industries.

"We should consider a state fund that would buy up shares of strategic companies that have been devalued," Sarkozy said Tuesday, Oct. 21, in a speech to the European Parliament. "When the crisis is over, we could then bring the shares back to the market."

The move would also prevent companies from being snatched up by foreign companies during the financial crisis, he said.

"I wouldn't like European citizens to wake up in a few months' time and realize that European companies belong to non-European capitals," he told parliamentarians.

European sovereign wealth funds?

Sarkozy said these sovereign wealth funds could provide an "industrial response" to the financial crisis. Sovereign wealth funds are state-controlled investment vehicles that are typically controlled by energy-rich countries such as Russia and Saudi Arabia.

Some European and US companies have worried that the governments could use such funds to advance political agendas.

Sarkozy said he was "well aware of disagreements" on the subject.

"But I cannot imagine being told that a united European response was needed for the financial crisis, but not for the economic crisis," Sarkozy said. "Our duty is that in Europe we can continue to build ships, aircraft, cars."

Berlin has been particularly cautious about taking stakes in private companies and decided to look for industry-specific support programs rather than a general economic rescue package.

German Economy Minister Michael Glos said Sarkozy's proposal "goes against the successful principles of our economic policy."

"Current state intervention in the banking and insurance sector are an indispensable exception so as to prevent a possible breakdown of financial flows and help protect jobs and growth," Glos said in an advance edition of Wednesday's Frankfurter Allgemeine Zeitung. "Germany remains open to capital from all around the world."

European Commission chief Jose Manuel Barroso said the idea should be studied more closely.

"I am not, in principle, against sovereign wealth funds," Barroso told reporters, but added that the EU "must find common rules if possible" to deal with them.

More financial oversight needed

Barroso was also reserved in reacting to Sarkozy's idea of establishing a "financial government" for the euro zone. This new institution, if created, would work alongside the European Central Bank (ECB) to define the euro zone's economic politics.

Barroso said he wouldn't want a new institution giving instructions to the ECB. Germany has previously indicated that it is against such a move, saying that it would undermine the independence of the central bank.

Paris wants an institution to counter the power of the ECB, although the exact form such an "economic government" would take has never been clearly defined.

"It is not possible for the euro zone to continue without clearly identified economic government," Sarkozy told the parliament.