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EU summit on Sept 17 to prepare for G20 meet

04 September 2009, 23:56 CET
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(STOCKHOLM) - EU leaders will meet on September 17, seeking to overcome differences on curbing bankers' bonuses ahead of G20 talks on the global economic crisis, Sweden's prime minister announced Friday.

"Banks would have gone bankrupt without taxpayers' money and to say now 'it's business as usual,' to go back to bonuses, is not correct," said Fredrik Reinfeldt, whose nation holds the rotating EU presidency.

"It is my intention to call an extraordinary summit on the evening of September 17," Reinfeldt said on the margins of an informal meeting of EU foreign ministers in Stockholm.

Bankers "will see a growing reaction from the citizens. It's important to send a signal, 'Don't get back to the situation where it started'," he said.

However, while many EU member states are loudly touting the need to curb the worst excesses of the financial sector, much of which was bailed out thanks to taxpayers' money last year, there are sharp differences as to the remedies.

France and Germany have said they want the European Union to agree on a common position on financial sector bonus and pay issues ahead of the G20 summit.

Britain has also talked about curbing excessive bonuses but the devil remains in the details.

London -- the biggest financial centre in Europe -- is not happy with the French idea of introducing caps on bonuses.

And British Prime Minister Gordon Brown has said instead that pay and bonuses should be based on long-term success, not short-term speculative gain.

Banks should "claw back" rewards for bankers if their performance suffered in subsequent years, he says.

For his part, Reinfeldt said that the special EU summit in Brussels would be "looking to suggestions close to what (French) President Sarkozy has proposed on bonus limits."

At the same time seven European finance ministers, including those from Sweden, France and Germany, called for new strict rules governing bankers' bonuses, arguing that in some instances the payment of such compensation has been "improper, cynical and unacceptable."

The seven ministers, in a hard-hitting letter published in newspapers in their countries, appealed to their colleagues in the Group of 20 to back their demand that "a strict compensation policy be put in place."

Representing France, Germany, Italy, Luxembourg, the Netherlands, Spain and Sweden, the finance ministers said guaranteed bonuses for more than one year should be banned.

Britain was notable by its absence from the letter's signatories.

Exorbitant banker bonuses were also on the agenda for finance chiefs from the 20 leading developed and developing countries, meeting in London to discuss steps to sustain a nascent recovery in the world economy.

"Overall, the G20 summit will give us an important opportunity to discuss and coordinate among G20 continued responses to the economic and financial crisis -- and to the important issue of climate financing," said Reinfeldt.

"All these questions and proposals needs to be discussed among EU's heads of state and government before Pittsburgh, so that the EU can have a common and strong position at the G20 summit and speak with one voice," he asserted.

The G20 group of the world's leading industrialised economies are to meet in Pittsburgh, Pennsylvania on September 24-25 to discuss new market regulations in the light of last year's global financial meltdown.

"I hope the Pittsburgh summit will inject political energy into the international climate negotiations," Reinfeldt also said, as the EU foreign ministers gathered in Stockholm for two days of talks.

Financing the fight to manage climate-change is a key element in the build-up to attempts to conclude a new global treaty on the issue in December in Copenhagen.

Informal European Council

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