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EU DECIDE TO CUT BANKER BONUSES.
The European Union’s finance ministers said Wednesday they had reached an agreement on the need to curb bankers’ bonuses that would place the bloc in a strong negotiating position at this month’s Group of 20 meetings in London and Pittsburgh. But ministers, meeting informally in Brussels, conceded that the details of their proposals still needed to be worked out, and that Britain remained sceptical about plans that could weaken the City of London.
“We have a strong common European position on the issue of renumerations and bonuses,” said Swedish Finance Minister Anders Borg, whose country holds the EU’s rotating presidency.
Wednesday’s talks in Brussels were part of a series of preparatory meetings ahead of the September 24-25 summit in the United States, in which G20 leaders will work to reform global finance in the wake of the credit crunch.
German Chancellor Angela Merkel this week singled out a 15- million-euro (21.5-million-dollar) payout for Karl-Gerhard Eick, who is stepping down as chief executive of the insolvent German retailer Arcandor.
The country’s finance minister, Christine Lagarde, said in Brussels there was “complete agreement” on the French position among the 16 countries that share the euro. However, she said only “massive support” was expressed by the larger group of EU finance ministers, which includes Britain.
France wants the G20 to adopt a special tax on the financial sector and a cap on variable pay.
“We need a level playing field. Gross Domestic Product in the eurozone was down just 0.1 per cent after contracting by 2.5 per cent in the first quarter.
The EU’s economic and monetary affairs commissioner, Joaquin Almunia, said he hoped that the return to economic growth of France and Germany in the second quarter would trigger “positive spillovers” for the rest of the union.
In Brussels, ministers also agreed to raise the European contribution to the International Monetary Fund, from 75 to 125 billion euros.