European leaders ganged up Thursday against a favorite target — fat bonuses to bailed-out bankers.
British Prime Minister Gordon Brown and French President Nicolas Sarkozy agreed it was a good idea to slap higher taxes on performance pay, especially considering they are back on the rise soon after last year’s financial meltdown that led to taxpayer-funded bailouts in some cases. German Chancellor Angela Merkel also embraced the idea.
“We agree that a one-off tax in relation to bonuses should be considered a priority,” the two wrote in an editorial in the Wall Street Journal.
Brown’s government on Wednesday said it would impose a one-time 50 percent tax on 2009 bonuses above 25,000 pounds ($40,800), and French and British diplomats said Sarkozy made a similar commitment.
The French and British leaders met in Brussels ahead of an EU summit Thursday and “are completely aligned,” said a British diplomat, who demanded anonymity because the talks were private.
Brown also wrote a letter to his 26 fellow EU leaders, urging them to take quick action on climbing bank bonuses.
“Again now, banks have made very large profits, and some of their employees have received bonuses equal to many multiples of average earnings,” he wrote.
“While the benefits of success are reaped by the few, the costs of failure are borne by the many. We must therefore act,” he wrote.
Merkel threw the weight of the EU’s economic powerhouse behind the idea. She described Britain’s tax as an “attractive idea” that might encourage some lessons to be learned in London’s financial district.
“We have always repeatedly said, from the German point of view, that we want banks and their businesses to pay a share, that the burdens of the crises could be shared and not loaded on to taxpayers alone,” she said at a meeting of European center-right leaders in Bonn, Germany.
An official in the French Finance Ministry said France has decided on a one-off tax for 2009 bonuses, and that France needed it to be accepted in other financial centers before working out details. (AP)
