Bonuses - of bank or Media?

There have already been two countries on the seat of EU Presidency after France, but it seems Nicholas Sarkozy still loves playing the part of EU’s most vocal leader. He has plenty of ideas to be put forward and ensure that France always is the EU’s leading light and lone saviour. Fresh from his summer vacation he made his intention clear of leading the G-20 summit in Pittsburgh, and quickly crossed the border to Berlin. His idea, the radical one as it was put, was to eliminate the Bank Bonuses. Even before there could be a debate on the idea, this ‘another’ effort of Sarkozy glossed the headlines. The German election scheduled for September made it easier for Sarkozy to get support of Angela Merkel. This idea does find favour with the thousands who are still jobless, the fallout of the recession.

It is easy to see why Sarkozy is championing the idea? This ‘reform’ even if implemented would not mean much for France. Alongwith Germany, France does not have any major financial centers to be affected. This is totally different for London or New York, where this idea if implemented might see the business migrate elsewhere. None the less, in all the countries this idea, whether implemented or not, makes a bold and popular headline.

This recession has been tough and there could have been few things that could have been done differently. Many radical reforms are needed; these reforms should be for eliminating the possibility of any recurrence and not only for media attention. One such example is crushing blow on tax havens. I am still not sure how ‘offshore banking’ contributed to recession, and how its death will help in making sure recession of this kind will not happen again. Was UBS alone affected by recession?

As I write this, the deliberations of G20’s Finance Ministers in London have just ended. Not surprisingly, the proposal on ‘bank bonuses’ failed to generate a consensus. It is a setback for both French and German Finance ministers, but I am sure they saw it coming. No setback for Sarkozy, he achieved what he wanted. It’s time for Swedish Prime Minister, Fredrik Reinfeldt to take note.

May I suggest French President to reform the ‘EU subsidy on agriculture’ next?