Brussels, Sep 2 (DPA) The European Union’s finance ministers were meeting in Brussels Wednesday in a bid to curb bankers’ bonuses amid strong opposition from Britain, home to the bloc’s most important financial centre.
“Bankers are partying like it’s 1999, and it’s actually 2009. The bonus culture must come to an end, and it must come to an end in Pittsburgh,” said Swedish Finance Minister Anders Borg, who was chairing the meeting as current holder of the bloc’s rotating presidency.
The informal talks in Brussels are part of a number of preparatory meetings ahead of this month’s Group of 20 meeting in Pittsburgh, which will be tasked with reforming global finance in the wake of the credit crunch.
Some of Europe’s big banks have attracted the wrath of governments for paying out lavish bonuses to their top managers at a time of rising unemployment.
The backlash has been particularly strong in France, which has taken the lead in formulating proposals on the table at Tuesday’s meeting.
“We have very firm proposals to put some order into bonuses and renumerations,” French Finance Minister Christine Lagarde said as she arrived in Brussels.
Describing the bonus issue as “emblematic” of all that is wrong with capitalism, Lagarde’s proposals include a special tax on the financial sector and a cap on variable pay.
France has already imposed tough curbs on bonuses for its own bankers and traders. But while it can count on the support of most EU member states, including Germany, Luxembourg and the Netherlands, it must yet overcome strong resistance from the City of London.
“I’ve seen some major countries move in the right direction, but not everyone is yet moving as quickly as they possibly could,” Dutch Finance Minister Wouter Bos said when asked about Britain’s position.
British Prime Minister Gordon Brown told the Financial Times this week that imposing a cap on bonuses would be “very difficult in an international environment”. His fear is that such limits would prompt London’s top bankers to migrate to other parts of the world.
Meanwhile, the EU’s executive arm, the European Commission, has already recommended that bonuses be linked to the long-term performance of a company.
Tuesday’s meeting was taking place against the backdrop of fresh economic data showing that the EU and the eurozone were beginning to come out of their worst recession in decades.
Eurostat figures published ahead of the talks showed the EU economy contracting by a revised figure of 0.2 percent in the second quarter, after plummeting by 2.4 percent in the first three months of the year. Gross Domestic Product in the eurozone was down just 0.1 percent after contracting by 2.5 percent in the first quarter.
“We need to build on this good news to continue tackling the challenges of this crisis and to better coordinate our actions,” said Economic and Monetary Affairs Commissioner Joaquin Almunia.
The finance ministers’ meeting was preceded by talks restricted to the 16 European countries that share the euro.
Eurozone governments have already pumped hundreds of millions of euros into their struggling economies and must now discuss how to bring down their enormous debt mountains in order to sustain the euro on the international currency markets.
