European Union leaders will tell the G20 this month that public support to the economy must be maintained and while plans to withdraw it should be drafted now, implementation should come only when recovery is assured.
“The G20 should reaffirm its determination to continue implementing coordinated policy measures in order to develop the basis for sustainable growth and to avoid a repetition of the present financial crisis,” a draft EU document showed.
“Efforts must be maintained until recovery is secured,” said the draft, obtained by Reuters and prepared for an informal meeting of EU leaders on Thursday.
Leaders of the world’s 20 biggest developed and emerging economies meet in Pittsburgh on Sept. 24-25 to discuss ways to ensure economic recovery and prevent a repeat of the financial crisis.
The EU leaders meet on Thursday evening in Brussels for an informal dinner to prepare a joint stance for Pittsburgh.
The document stressed that while the withdrawal of fiscal stimulus across the globe should be coordinated, it should take into account specific situations of individual G20 members — effectively leaving each country a free hand.
The heads of the 27 European Union countries will also call for giving the International Monetary Fund a key role in global policy coordination and commit to provide the IMF with a total of €125 billion [$183.5 billion] in extra funds. That would be an increase on the €75 billion [$110 billion] that they agreed earlier this year.
EU leaders will urge the G20 meeting in Pittsburgh to set binding rules on bankers’ bonuses that would link the amount of cash paid with long-term performance, and that would be backed in each of the G20 countries with the threat of sanctions.
The draft agreement of EU leaders said rules on bonuses should ensure that the board of the financial institution had oversight over the amount paid and the risk involved. There should be no guaranteed bonuses and the system would be more transparent.
Stock options could be exercised or stocks sold only after a certain period of time, EU leaders will say, and bankers’ pay could be reduced if the bank’s performance deteriorated.
Bonuses should be limited either in relation to a certain proportion of total pay or the bank’s revenues or profits.
(Reporting by Jan Strupczewski; Editing by Dale Hudson)
Topics Europe
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