International Herald Tribune – Ronald Reagan’s catchphrase when it came to arms control, "’Trust, but verify," may be the slogan finally adopted by a Europe that is attracted to, but unnerved by, the vast pools of capital amassed by governments in the Middle East, Russia and China.
The sudden rise of these sovereign wealth funds, which have as much as $3 trillion in assets on hand, touched a raw nerve on the Continent last summer.
Politicians as senior as Chancellor Angela Merkel of Germany warned against being "naïve" about the intentions of foreign governments. The sovereign funds, which combine the power of rising states with the secretive behavior of hedge funds or private equity investors, looked sure to bring tough rules limiting their activity.
But that was then.
"Since the credit crunch began, you can sense a different mood," said Philip Whyte, a senior researcher at the Center for European Reform, a private research group based in London. "All of a sudden sovereign wealth funds have become the knights that ride to the rescue, and that has probably defused the potentially protectionist edge to the issue."
