Merkel supports French push for restricting the marketing of commodities

By John O'Donnell

BRUSSELS, Oct 5 Reuters-Chancellor Angela Merkelthrew weight behind a French plan for more stringent controls oncommodity negotiation, deepening an Alliance against financialspeculators top two economic power of the euro area.

France takes over the Presidency of the Group of 20 of the most important economies of theglobe in November and has put the odds aregulatory violent everything from grain goldat at the top of the agenda for meetings of the Agency.

Politicians have accused the speculators driving food andenergy values for record highs in 2008, while the tops of wheat andcocoa this summer have rekindled the debate about the trading limits.

France now more checks, including US-style capsknown as position limits.

"We are very volatile prices and thus will be fullysupport tackle this issue, ' toldreporters Merkel in front of a collection of Asian and European politicalleaders in Brussels.

Observations of Merkel gives evidence of a multifaceted alliancebetween Paris and Berlin in reshaping the way in which the financialindustry, potential reforms by the hedgefund watched it rules the State budgets.

During the summer France claimed a German initiative violent on speculative transactions in shares and Government debtmarkets.

Last week, diplomats said Berlin gave Paris blessingto block an agreement on new hedge fund rules, Exchange supports negotiations concerning the introduction of more stringent rules for governmentspending within the European Union.

The influence of the partnership in Europe will meanaction about their demands, Michel Barnier Europeancommissioner of reorganized financial services andan appointee of French President Nicolas Sarkozy.

Speaking for the European Parliament on Tuesday Barnierpromised "root and branch reform of the funding."There is no speculation in progress in somescandalous commodities, "hesaid.

But, as in the past, Berlin and Paris are likely to faceopposition in each new regulation from London, Europe ' sfinancial Centre and hub for trade in commodities, presenting an obstacle that could force them to drop their proposals or waterdown.

France and Germany also may struggle to convince partners theirglobal backward position, as was the proposal for a tax on financial transactions and distribution includingshare afailed.

While many European politicians have denounced financialgamblers, is likely to be Washington's morelaissez-faire approach--the top slider Gary Gensler has often arguedagainst speculation on the label of a "dirty word".

The European Commission, the Executive power of the EU that writes the first draft of the law, has already reveal changes derivatives fortrading rules and former French agriculture Chief Barnierwill proposes extending the scheme to the end of this year.

But for Brussels to go alone with strict rules will bevery difficult.

(Edited by John Stonestreet)

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