PARIS (Reuters) - The European Union should go ahead with imposing limits on bankers’ bonuses even if the United States does not after this week’s G20 summit in Pittsburgh, European Commission president Jose-Manuel Barroso said on Sunday.
“It would be interesting, important, useful to have if possible the same rules in the world (...) to have the Americans at our side,” he told the France TV5 television station.
“But in this case of the bonuses, I am absolutely clear — it is such a scandal what is happening, it is really an ethical problem and I believe that, if necessary, we have to do it on our own,” he said.
The issue of bonuses is expected to be one of the toughest on the agenda at the G20 meeting in Pittsburgh with clear differences between the United States and Europe.
The chairman of the Eurogroup of euro zone finance ministers, Jean-Claude Juncker, said on Thursday that the European Union must act alone on the issue if necessary and shouldn’t be deterred if the United States won’t join in its drive against excessive bonuses.
Earlier on Sunday French economy minister Christine Lagarde said she was confident that the G20 meeting will decide on a framework to curtail banker bonuses, despite U.S. President Barack Obama being against limits.
“I know well the American mentality and it is going to be a hard slog, I can’t pretend,” she told the Journal de Dimanche Sunday newspaper in an interview.
Lagarde said that if the G20 set a percentage limit on bonuses in relation to activity that would be a “big victory for the European Union and France.”
She said there was also a difference of opinion on bank capitalisation rules.
“What we will decide is key for the survival of (French) banks in world competition and therefore for the French and European economy. We have to find an agreement with the U.S. so that the same rules apply to everyone,”
“At this stage the American proposals are favourable to their banks and could penalise ours. It would be a blow for (French banks) as thy did not create the crisis and are recovering faster than the Americans,” she said.
France has been one of the most vocal advocates of imposing restrictions on bankers’ bonuses in response to public outrage over huge payouts being made at a time when the financial sector is still propped up by massive amounts of taxpayers’ money.
President Nicolas Sarkozy has proposed tough restrictions that could include caps on the size of individual bonuses but the United States and Britain have been reticent.
Several other options have also been put forward, including a proposal from the Financial Stability Board to set restrictions on the total amount banks with low levels of capital can pay out in bonuses.