Heading into next week’s G20 summit European Union leaders say they have agreed in principle on curbs to bankers’ bonuses, but exactly how that would be done has still not been nailed down.
The German Chancellor Angela Merkel said a new framework for regulating financial markets should be in place by the middle of next year, including bonuses. She told reporters in Berlin: “There are concrete results which we, and especially I, expect from Pittsburgh – and we MUST have them in order to make Pittsburgh a success. We need to reach a consensus regarding the regulations on remuneration. This was not adequately discussed in London. And I am talking explicitly about the bonuses.” Even Britain now appears to be giving qualified support. It could however be a problem getting the United States on board. Economist Thomas Piketty, from the Ecole d’Economie de Paris, told euronews: “The only thing that could really be effective would be taxation; increase the tax rate on these exaggeratedly high incomes, these payments above half a million or one million euros. Only by increasing tax rates at those levels will you get results.” The G20 leaders will also discuss when to end stimulus measures, how to speed up and finance the fight against climate change and how to stop the global imbalances that have plagued the world economy reappearing when recovery finally comes.