Monday, 12 October 2009
As a “letters-from-Germany-columnist” my articles for JTW cover – naturally – German home and foreign policy issues. Heading towards Germany’s neighbour France, let me take an exceptional exit from the business-as-usual-track this time.
The journey starts in Frankfurt, one of Europe’s most attractive financial centres and home to the European Central Bank (ECG) and to BaFin, Germany`s financial supervisory authority which approved a license application of Istanbul-based Kuveyt Turk, a leading participation bank established in 1989, early this month. Hence, Kuveyt Turk will open its first branch in Mannheim and hopes to reach Germany’s 4.5 million Muslims, most of them Turkish-originated, with a wide range of sharia-compliant financial and savings products. The Islamic banking sector has grown 10 to 15 percent a year since 2003 to a total volume of US$ 700 billion in 2008. Now, after the global financial meltdown, interest-free banking is ever-relevant as an investment alternative, especially since Gulf sheiks have been enjoying the “shopping” atmosphere on Europe’s investment markets. London, at the moment, is the dominant hub and Western leader of Islamic banking, but France is keen on making Paris the more important site for sharia-friendliness.
In August the French parliament passed a law that allows the issuing of Islamic “suquk” bonds after the French government had announced its readiness to clear legal and fiscal hurdles to Islamic finance in mid-2008. Christine Legard, finance minister in Nicholas Sarkozy`s government, has been briefing investors from the Gulf and other parts of the Muslim world since last year and is optimistic about the success of France’s new economic path. According to a report for lobbying group Paris Europlace France could become a leader in the sector, even overtaking the current dominance of London by drawing US$ 145 billion in capital by 2020. The total volume of assets of more than 5 million French Muslims is estimated around US$ 10.5 billion. Central Bank governor Christian Noyer addressed a major conference last week that yielded some announcements on promoting Islamic finance in the French economy.
There are many critics of this new government initiative, among them Henri Emmanuelli, deputy leader of the Socialist Party, accusing the government of undermining France's much prized secularism to accommodate wealthy interests. Or the far-right Front National, denouncing Islamic finance as a "community-based peril" resulting from immigration.
While making the market place “France” attractive for Islamic money the Sarkozy administration and senior political big-wigs debate whether to ban the burqa, an enveloping outer garment worn by women traditionally in some Muslim countries, from public space. In a speech in mid-June, Sarkozy said that the head-to-toe Islamic garment was not a symbol of religion but a sign of subservience for women. Already in 2004, at that time under Jaques Chirac, a controversial law forbidding any conspicuous religion symbols from state schools and government offices was passed. Sarkozy`s speech followed an appeal by 65 French MPs for a parliamentary commission to examine whether Muslim women who cover themselves fully in public undermine the secular tradition in France as well as women's rights.
The whole situation is a challenging and confusing one. Both, the Burqa and suquk bonds, come from the Islamic world. While the one attracts uproar, the other is flattered with French charm. Well, the answer is easy: Islamic symbols are seen as a threat for Europe’s occidental-Christian cultural heritage, but Islamic money is not. Money is money, and not a determinant of personal identity. Europeans need it, no matter where it comes from, to strengthen their public welfare services in a period of demographic change and economic competition with China and India. That’s Europe’s hypocrisy.
Another Act of Balance for Merkel
