France and Germany declare war on bankers' bonuses - by Phillip Inman
France and Germany are squaring up for a fight with Britain and the US over bankers' bonuses after President Nicolas Sarkozy and the German chancellor, Angela Merkel, agreed a hardline stance before the G20 finance ministers' meeting this weekend. France and Germany will seek widespread agreement for proposals that will limit bonus payments and the risks taken by banks. The proposals are aimed at preventing a repeat of the financial crisis. The French administration plans to ban banks from winning government contracts if they fail to agree to limits on bonuses, while bonuses must be deferred for at least four years under rules being considered by Merkel's cabinet.
However, the Obama administration is expected to say tomorrow that it wants the summit to focus on getting the world economy back on its feet and promoting financial stability. Note EU-Digest: Unfortunately the Obama administration, which faces an uphill struggle to pass healthcare reforms through congress does not seem to have the courage to oppose the risky bonus culture on Wall Street or the powerful financial industry.
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