EU should tackle bonuses alone if necessary-Juncker

September 17, 2009

Luxembourg Prime Minister Jean-Claude Junker addresses the Tamedia AG Dolder meeting 2008 in Zurich January 29, 2008.  REUTERS/Christian Hartmann  (SWITZERLAND)    BERLIN, Sept 17 (Reuters) – The European Union must act alone if necessary to curb bankers’ bonuses, the chairman of the Eurogroup of euro zone finance ministers, Jean-Claude Juncker, told Deutschlandfunk radio on Thursday.
   Speaking before the G20 summit in the U.S. city of Pittsburgh later this month, Juncker said European countries shouldn’t be deterred if the United States didn’t join them in their drive against excessive bonuses.
   “If this is the case then the Europeans need to go it alone. Over time this would gain so much momentum that the Americans wouldn’t be able to close themselves off to a unified, international coordinated process,” Juncker said.
   France and Germany want leaders of the Group of G20 major developed and emerging economies to adopt strong measures to curb excessive bank bonuses that have sparked public anger given huge bailouts of the sector and rising unemployment.
   Juncker, who is also Luxembourg’s Prime Minister, said he expected that a special meeting of EU leaders in Brussels later on Thursday in preparation for the summit would bring progress on issues such as limiting the size of financial institutions.
   There was growing recognition among European governments that banks could not be allowed to grow to such a size that they could blackmail state governments if they fell into difficulties, he said.
   One means of achieving this would be to set higher demands for banks’ own equity if they are expanding.
   “This is a path we will certainly take,” said Juncker.
   He added there was also progress over the introduction of “malus” rules, where bankers’ salaries are cut in the case of poor performance, with many European states believing a malus system was necessary in parallel to a bonus system.
   Bonuses must be linked to a bank’s long-term business development. “If things go wrong then it must be possible to reduce bankers’ pay,” Juncker said.
   (Writing by Alexandra Hudson; Editing by Ruth Pitchford)
   ((alexandra.hudson@reuters.com; +49 30 2888 5085; alexandra.hudson.reuters.com@reuters.net))
 Keywords: EU JUNCKER/BONUSES
  
Thursday, 17 September 2009 08:18:44RTRS [nLH721950 ] {C}ENDS

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