The Swedish Presidency focuses on coordination. The intention was to coordinate the EU Position before the meeting of the G20 finance ministers at the weekend in London. Result: strong words concerning manager salaries and bonuses, more money for the IMF, no details about the future regulation of the financial markets.
Europe’s politicians and their citizens are angry. Just when the first tender shoots of recovery were reported about in the media, reports on fat profits for the banks which had been propped up with taxpayers’ money and the speedy return to big bonuses for their managers also made the round. And that at a time, where all experts expect that in spite of record unemployment and blanket short-time work the worst is yet to come on the labour markets.

Reason enough for some Member States, in particular Germany and France to demand - with maximum media effect - a restriction for the salaries of managers. The outcry from London – Europe’s most important financial centre – came immediately. As a result, the meeting of the finance ministers in Brussels this week was medially dominated by the subject of manager salaries. After the meeting, the Swedish finance minister Anders Borg declared on behalf of the Council Presidency that one had been successful in finding a “strong joint position” on the subject. In times of social tensions the old bonus culture could no longer continue. When it came to bonuses said Borg, one would need solutions with “muscles and teeth”. The details, however, had to be drawn up first and then coordinated with the G20 partners.

The Spanish Commissioner for Economic & Financial Affairs Joaquín Almunìa went slightly further. The finance ministers had agreed to represent the European position that “business as usual” had to be avoided after the crisis – and not only in respect to manager salaries at the meeting of the G20 finance ministers this weekend.

As welcome an agreement concerning clear regulations for manager salaries and bonuses might be, as critically one had to see the simultaneous narrowing down of the discussion on the future of the finance market regulation to this one single subject. It was only before the summer break when the Commission submitted proposals on manager salaries and bonuses, which are completely non-binding and voluntary. The AK has strongly criticised this voluntariness, as it did not work in the past. That the income of managers is only – even if the media seem to concentrate on it – a sideshow shows the list of all those subjects, which were not discussed by the finance ministers this week: from the regulation of hedge funds via the future structure of the financial supervision up to tax oases and the containment of destabilising speculations with derivates. Whether a future crisis at the expense of taxpayers and employees can be avoided depends on the fact whether Europe uses its voice in the world to support these subjects or whether “business as usual” will continue.

The further itinerary includes a (not yet officially confirmed) meeting of the EU heads of state and government on 17th September in Brussels. The intention is to determine the European position on the future of financial market regulations, before the Europeans meet their partners from the remaining G20 states for the third time on 24th and 25th September in Pittsburgh to discuss the world after the financial crisis.