EU Agree on a Cap on Bank Bonuses
Intro: European Union leaders have agreed to push for binding rules on banker's bonuses at next week's G20 meeting. We hear Sweden's Prime Minister Fredrik Reinfeldt, at a press conference in Brussels last night. "Enough is enough, we need to move away from the current culture of compensation. From our point of view the bonus bubble burst tonight"
It is Fredrik Reinfeldt who will be representing the EU at the G20 meeting in Pittsburgh USA next week. Thursday's meeting in Brussels was to find a joint EU position ahead of that summit. Special attention was given to rules regulating the bankers bonuses, where the 27 countries agreed they want a cap on how much an individual banker can get in bonuses, and a limit to how much of the bank's profit can be paid out as bonus. They also agreed that it should be possible to demand back money paid out in bonuses, if it turns out the bosses have not acted in the long-term interest of the bank.
At the G20 meeting, Reinfeldt will also, on behalf of the EU, push for higher demands on the kind of economic buffers that banks will have to have. The EU also wants an agreement on how the economic stimulus that governments currently are providing can be phased out. These "exit strategies" should be formulated now, and implemented when the economic recovery becomes clearer, says Reinfeldt.
Apart from the economic situation, the Eu-meeting also discussed what can be done to move forward the negotiations that are supposed to lead to a new climate agreement in December. In the final statement from the meeting, the EU leaders refer to the European Commission's proposal from last week as to how much the EU should pay to help the poorer countries tackle climate change. Reinfeldt stressed that this money needs to be met with reduction targets from the developing countries. We'll have to wait for next week before we know if someone decides to take up that ball or not.