Brussels, 02/09/2009 (Agence Europe) - At a meeting on Wednesday 2 September in Brussels, EU finance ministers made a commitment to putting a stop to excessive payouts to bankers. The Swedish minister for finance, Anders Borg underlined at the end of the meeting that they had come together in a “united front” to denounce the “old culture of bonuses”. He also explained that the EU wanted to put the question of bonuses at the centre of future international discussions. The acting president of the Ecofin Council said that, “given that there is an obvious danger that the improvement in the economic situation could see too high, risks being taken, we need to take a decision at Pittsburgh”. Mr Borg did not go into further details but underlined the need to intervene at an international level. Backed by a “strong line” on the subject, the EU hopes to convince its partners at the “Finance G20” in London (4-5 September), the next stage in the process leading up to the Pittsburgh Summit (24-25 September).
Mr Borg had already expressed criticism before this informal Ecofin and had stated that, “bankers are partying like it's 1999 and it's actually 2009”. He hammered home the fact that, “Bonus culture must come to an end and it must come to an end at the latest in Pittsburgh”. To accomplish this objective Borg repeated after the meeting that, “lofty but vague principles are not enough, rules are required, that closely link risk-taking and long-term consequences”. He provided assurances that “all member states back this strong line I have announced”. The EU will therefore go to London with a “very clear” message on obtaining a commitments from everyone, particularly the US, on whom Mr Borg had put “a lot of pressure” because, “we need equal conditions” to carry out ambitious action in this area. Mr Borg affirmed that, “We have a solid European position that we will put forward in London, which, I suppose, could pave the way to an agreement in Pittsburgh” even if, “there is still a lot to be done”.
His French counterpart, Christine Lagarde, simply added that, “initiatives by France have clearly formed an essential part of today's debates”. She also provided assurances that the French proposals had received broad support form the EU27. France came out with several proposals, and even envisaged a tax on bonuses, as well as a ceiling on the highest bonuses, elements which the United Kingdom still has certain misgivings. The Commissioner for Economic and Monetary Affairs, Joaquin Almunia stated that same morning that, “I think that the MS of the European Union should follow the guidelines that were included in our record in April, (…) and some of them are adopting measures that I consider broadly adequate to this regard”. The Eurogroup president, Jean-Claude Juncker, also supported the French positions.
On Wednesday, finance ministers also reached an agreement on increasing the additional contribution they wanted for the International Monetary Fund (IMF). Borg declared that, “we are prepared to meet our responsibilities for strengthening this body's finances” and confirmed that the European contribution would be €125bn (the EU27 had agreed up to €75bn in April. The question of how the figures would be shared out remains open.
Commissioner Almunia recognised that although there were positive signs, the European economy still faced a lot of problems, particularly on the labour market. Before chairing the Eurogroup meeting preceding the EU27 dinner, Mr Juncker said that the “time has not yet come to withdraw the fiscal stimulus. We have to continue this effort in the course of this year and next year. Then we will have to agree on an exit strategy”. Commissioner Almunia insisted that, “the exit strategy should be coordinated first of all at the European level then of course also at the global level and we will discuss this in the next G20 meeting in London”. (A.B./trans/rh)