EU finance ministers agree to limit bankers’ bonuses

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VietnamNet English - 105 month(s) ago 6 readings

"The bonus culture must come to an end. There was a strong common European position," Swedish Finance Minister Anders Borg, whose country holds the EU rotating presidency, told reporters after chairing an informal meeting with his EU counterparts on Wednesday.

European Union (EU) finance ministers agreed on Wednesday to push for a global deal to crack down on bankers' hefty bonuses.

Borg said EU countries would send this clear common message to the G20 finance ministers' meeting in London later this week, and try to push the issue at the upcoming G20 summit in Pittsburgh of the United States three weeks later.

"We need to see progress on the issue on the other side of the Atlantic. We need a level playing field," he said.

Bankers' bonuses have come under strong criticism in the wake of the financial crisis since the current bonus culture was blamed for bank managers' reckless and excessive risk-taking, which fueled the financial crisis.

It stirred uproar when bank executives received huge amount of severance pay even if the financial institutions they managed had run into trouble.

"The bankers are acting like it is 1999 but it is actually 2009," Borg said. "The bonus culture must come to an end and it must come to an end in Pittsburgh."

Among EU member states, France and Germany have been pushing hard for a global deal to rein in bankers' bonuses at the Pittsburgh G20 summit.

"There is now a global public opinion. All over the world, people are sickened by the bonus system. We want to bring to an end the scandal of bonuses. We want it to stop," French President Nicolas Sarkozy said after a meeting with German Chancellor Angela Merkel in Berlin on Monday.

Both France and Germany wanted to see actions rather than commitments on bankers' bonuses at the Pittsburgh summit, but doubts remained as to whether their British fellows could be convinced.

The British government was reluctant to accept limits on bankers' bonuses, fearing its London City would be less attractive to talented bank managers and lose edge as one of the world's major financial centers.

British Prime Minister Gordon Brown said in an interview with the Financial Times on Tuesday that it would be difficult to enforce any limit on bankers' bonuses.

German Deputy Finance Minister Joerg Asmussen told reporters after the meeting that Britain had accepted the proposal in principle and now the EU would have to find a common G20 position in London.

"It will not be enough for Europe to take a position," he said.

Borg admitted there is still "a lot of work" to do and the EU has to exert "a lot of pressure on the other side of the Atlantic," referring to the United States.


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