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BRUSSELS – Sweden’s Finance Minsiter Anders Borg said that "The bankers are acting like it's 1999 but it's actually 2009”.
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Swedish Finance Minister Anders Borg, whose country holds the rotating EU presidency, gave indirect support to a French proposal to set international limits on bankers' bonuses and said "We must stop the bonus berserk to restart."
"The bankers are partying like it's 1999, and it's 2009," he told The Swedish Wire and other reporters on his way to the Finance Minister's meeting in Brussels.
Bonuses in the finance sector have been in focus among many politicians since the credit crunch started and the critique has escalated the last couple of days. On Wednesday, the EU's finance ministers, lead by Sweden's Anders Borg, tried to come together and reach a conclusion on how to limit the bankers' bonuses.
"The bonus culture must come to an end and it must come to an end in Pittsburgh [Pennsylvania, where G20 leaders will meet], he said.
Last week French President Nicolas Sarkozy announced his intention to urge his G20 partners to limit banking bonuses, after winning a commitment from French bankers for a system of performance-related pay for traders.
"There is now a global public opinion. All over the world, people are sickened by the bonus system. We want to bring to an end the scandal of bonuses. We want it to stop", said French president said.
The French proposal has already received support from Germany and the European Commission.
Britain however, mindful of protecting the financial capital of Europe in London, has voiced reservations as has the United States.
Many bank chiefs believe such a bonus cap would be ineffective merely at national level and must be also be introduced by other major banking nations.
Support for a bonus crackdown came from senior EU figures including Jean-Claude Juncker, head of the Eurogroup of 16 finance ministers. But the issue will only be resolved if leaders of the world's biggest industrialised economies, led by the United States, agree to do so in London this weekend.
There, a preparatory meeting of finance ministers from the Group of 20 countries will attempt to agree a common position to take to Pittsburgh on September 24-25 for a G20 summit hosted by US President Barack Obama.
"There was a strong common European position on the issues of remuneration and bonuses today, which is warmly welcomed," Borg said after EU finance minsters met in Brussels.
"We will see social tension in our societies given that we are still in a very precarious position in terms of the labour market," he added.
"In that kind of environment, it's very important that we... give a clear message that the old bonus structure must come to an end."
Questioned on Britain's reservations, he admitted: "There is a need for muscle and teeth, not only principles and guidelines."
He said while there is "a lot of work" still to be done, that the EU had put "a lot of pressure on the other side of the Atlantic" to address the bonus issue.
He also argued that London was an important financial centre for "the whole of Europe, and in that respect it is important to find rules" that are commonly agreed.
Asked how he expected to acquire the "muscles and teeth," Borg said targeted action would have to be agreed by the G20 countries.
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Last Updated (Wednesday, 02 September 2009 17:08)