New dispute over capping bonuses in the eu
The european finance ministers approved the compromise with the european parliament on tuesday. But under pressure from the uk, they want to further clarify "technical details" with the people’s representatives in the coming weeks. Parliamentary president martin schulz was disappointed in brussel: a single member state could not block legislation.
German finance minister wolfgang schauble (CDU) said: "it wasn’t an easy road. We have made good progress."He defended his course of not having a qualified majority vote on such fundamental issues. Once the details have been worked out, it should be possible to have the british on board as well and thus reach an amicable solution. "The united kingdom is in a difficult phase of domestic politics."We must not strengthen the political forces that want to leave the EU".
"We have a broad majority in favor of the compromise package," summed up ireland’s head of department michael noonan, who currently leads the european treasurers. The permanent EU ambassadors of the 27 EU countries were instructed to stop the negotiations with the people’s representatives. Several heads of department support the irish course. "This is regulatory policy, and that is what is being done here, no more and no less," summed up luc frieden from luxembourg.
Great britain’s george osborne made it clear that he could not support the compromise at present because of the bonus issue. It fears competitive disadvantages for the city of london, europe’s major financial center. The package also includes stricter rules for banks – they will have to hold more capital as a crisis precaution in the future.
The irish eu presidency and the european parliament agreed in principle last week on the banking package and its bonus provisions. Extra payments to top bankers are to be limited to the amount of the base salary; in exceptional cases, the bonus may be doubled.
These rules are no longer to be softened, said schauble. "I don’t think the european parliament would accept it."The treatment of bonuses to be paid in the long term is still to be clarified. London expects advantages from this. EU internal market commissioner michel barnier said: "this gives an additional flexibility, but it will remain very moderate." The entry into force of the new law remains controversial. According to this, the start date could be 1. January 2014 still to be postponed.
The new law also requires banks to hold more and better capital reserves as a precaution against crises. European parliament to vote in april, according to schulz.
The euro crisis countries ireland and portugal are to receive extended maturities for their aid loans. The heads of department instructed the "troika" of lenders to submit proposals for it. Ireland and portugal want more time to repay their loans from the euro bailout fund because they want to spread repayment and interest burdens over a longer period of time. Eurogroup head jeroen dijsselbloem had already signaled accommodation. Ireland wants to achieve average maturities of 15 years. Final decisions to be made in april.