France seeks to woo Islamic finance

PARIS — As France debates whether to ban the burqa, the government is leading a drive to attract billions in investment from Muslim countries by turning Paris into the European capital of Islamic finance.

The French parliament this month has approved changes to legislation to allow Islamic "sukuk" bonds to be issued and the Qatar Islamic Bank has applied to be the first such bank to open in France.

Home to Europe's biggest Muslim minority, France is hoping to unseat London as the European hub for Islamic banking, offering products that comply with Sharia law and meet the needs of big investors mostly from Gulf countries.

But the drive is raising hackles, with some opposition politicians accusing the government of undermining France's much prized secularism to accommodate wealthy interests.

"When rich Muslims are concerned, we welcome them. But when they are poor, we put them on planes and deport them. This is all very upsetting," said Socialist deputy Henri Emmanuelli.

After failing to garner enough votes to derail the bill, the Socialist opposition is challenging the legality of the new legislation on Islamic finance before the Constitutional Council.

"We must not allow principles of Sharia law, or the ethics of the Koran to be introduced into French law," said Emmanuelli.

Under Sharia law, making money from money such as charging interest is not permitted and investment in companies involved in alcohol, gambling and tobacco is strictly off limits.

Much of the debate has focussed on opening up the French market to "sukuk" bonds, which are asset-based and do not pay interest. Investors receive coupons corresponding to part of the profits earned by the asset underpinning the bond.

Economists argue that money raised through Islamic finance could help spur France's nascent recovery with tools that are seen as financially sounder than the high-risk derivatives that led to the 2008 global meltdown.

Elyes Jouini, an author of a report presented to the government last year, estimates that France could tap into 120 billion euros in capital from Islamic finance by making adjustments to its tax and banking laws.

Only seven billion euros of those would be raised domestically among France's five million Muslims.

"There are extremely important financial reserves in Gulf countries and southeast Asia and these countries are ready to invest anywhere but they have specific rules in terms of ethics and in terms of the choice of investment," said Jouini.

"If France wants to attract this capital to its economy, it must offer the possibility for these investors to do so according to the rules of Islamic finance," he said.

Finance Minister Christine Lagarde and Central Bank governor Christian Noyer are to address a major conference in Paris this week that could yield some announcements on promoting Islamic finance in the French economy.

France's far-right National Front has denounced Islamic finance as a "community-based peril" resulting from immigration.

Jouini said opposition to the changes stems from "fear of the unknown."

"The term Islamic is confused with Islamist, the term Sharia raises fears because some think of women forced to cover themselves, the word fatwa raises fears because some think of Salman Rushdie, but a fatwa is nothing more than a decree," said Jouini. continues here

EDITOR'S Comment: It’s a tricky one this, as real nationalism opposes international finance, the practice of speculation, that is to say, the making of profit on the back of another’s labour, Islam recognises the crime of usury and for this we must salute them, however, nationalists realise that Islam does not belong within Europe. So whilst applauding their stance regarding interest we recognise that they do not and never shall belong here, France should be for the French, not swamped by hordes of others, be they from Islamic countries or indeed from the UK, “Nations for Native peoples”, being the nationalist take on things.

Young British Muslims angry with police and media

LONDON (Reuters) - Many young British Muslims feel demonized by the police and the media and say they have come under pressure to prove their loyalty since the September 11 attacks and the 2005 London bombings, a study has found.

The report for the Policy Research Center, an Islamic think tank, was intended to give young Muslims their own voice to counter assumptions made by outsiders.

It said young Muslims had been portrayed in the media as a threat to society and often struggled to convince people that they can be both British and Muslim at the same time.

Public debate over immigration, nationalism and integration has left them feeling under attack, while Britain's role in Iraq and Afghanistan has only increased the pressure.

"As well as facing questions and challenges to their loyalty, young Muslims ... are being pressed to define their identity in light of national and international events," the report said.

Young Muslims are too often asked to prove that their religion is peaceful and they are law-abiding, the report said.

"This is especially damaging when myths and stereotypes surmount accurate information, resulting in young British Muslims being portrayed as a threat to the wellbeing of the wider British communities," it said.

There are 1.6 million Muslims in Britain, 2.8 percent of the population, according to the last census in 2001. Unofficial estimates suggest the number could now be well above 2 million.

Most have roots in south Asia, particularly Pakistan and Bangladesh, a legacy of Britain's colonial rule.

POLITICAL DEBATE

With Britain in its worst recession since World War Two, immigration has risen up the political agenda. The far-right British National Party won its first two seats in the European Parliament in June, helped by fears over jobs and housing.

Prime Minister Gordon Brown, trailing in the polls with an election less than a year away, has repeatedly defended his immigration policy and has called the BNP "Nazi sympathizers."

Despite attempts by police chiefs to engage with the Muslim community, the report found many young British Muslims did not trust the police and felt harassed.

The report blamed a dramatic rise in Muslims being stopped and searched in the street after the July 2005 suicide bombings, which killed 52 people in London. Four British Muslims, three of Pakistani origin, carried out those attacks.

The report said sensationalist media reporting after the bombings created negative stereotypes of Muslims in Britain.

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