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December 11, 2009

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Sarkozy, Brown eye bigger tax on bonuses

BRITISH Prime Minister Gordon Brown and French President Nicolas Sarkozy presented a united front yesterday, agreeing that executive bonuses should be taxed more ahead of the European Union's first streamlined summit.

The leaders co-wrote an article in The Wall Street Journal appealing for "a new compact between global banks and the society they serve."

The Brown-Sarkozy byline appeared to heal a rift in Anglo-French relations that opened over the appointment last month of Frenchman Michel Barnier to oversee EU financial markets, including the City of London, a powerhouse of world finance.

Sarkozy had proclaimed victory over Barnier's appointment and denounced "Anglo-American" finance methods for causing the global economic meltdown. British bankers responded angrily, and the dispute reportedly scuppered a Sarkozy-Brown meeting last week.

But yesterday they agreed "we must ensure that through proper regulation, the financial sector operates on a level playing field globally." The two said executive bonuses, which have come to symbolize corporate excess, should be taxed more, and that "should be considered a priority."

Sarkozy and Brown were meeting in Brussels, Belgium, before joining the EU's other 25 leaders to further smooth over disagreements.

The two-day summit ushers in a new era for the EU, with leaders for the first time without their usual armies of advisers to thrash out two key issues - climate change and international banking supervision.

"They will not sit in a room that is a huge circle where you hardly can see each other and have to have a pair of binoculars," said a high-level EU diplomat. "Only they will sit there, nobody else."

The diplomat spoke on condition of anonymity.

The new regime stems from the Lisbon Treaty, bringing new rules to accelerate decision-making.


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