THE EU will push the US hard to cap the amount of money banks can pay in bonuses and to make greater efforts on climate change when they meet at next week’ G20 in Pittsburgh.
Over dinner the heads of state and government agreed to unite behind a comprehensive set of demands on the economy, financial institutions and climate change.
Taoiseach Brian Cowen emphasised the need for every country to agree to regulate banks to ensure there was no place from which rogue banks could operate. During the meeting, he briefed several of his colleagues about the progress of the Lisbon Treaty campaign. On his way into the summit he told journalists: “The trend so far has been helpful but there is two weeks to go and anything could happen.” The EU leaders agreed to push the G20 to agree to binding rules on extra payments and that any financial institutions breaking the rules would face sanctions.
They want bonuses to be related to a bank’s profits and say that part of the bonus should be held back for a time and if a bank’s longer-term performance is bad, then they will not receive the money.
Stocks could not be sold for a time either and directors and officers must not be completely sheltered from risk.
British Prime Minister Gordon Brown told journalists before the meeting that there must be an international agreement on bankers’ pay, bonuses and incentives. “Without international agreement, people will move to other countries”, with fewer constraints, he said.
The leaders increased the pressure on the US, China and India to make greater commitments to combat climate change and the US to pay more of the cost of helping poorer countries. The EU put the cost of helping them deal with climate change at Eur 100 billion a year by 2020. But they said this assumed more advanced countries (like China, India and Brazil) took appropriate action too. And they want the G20 to agree to shell out between €5 billion and €7bn billion a year between 2010 and 2012 on fast tracking the least developed countries into adapting for climate change. Mr Brown also wants the G20 to become a permanent institution to lead global economic management.
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