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Brown and Sarkozy to talk banking Brown and Sarkozy to talk banking
(39 minutes later)
Gordon Brown and Nicolas Sarkozy are expected to use a meeting to discuss the controversial appointment of a Frenchman to oversee European banking.Gordon Brown and Nicolas Sarkozy are expected to use a meeting to discuss the controversial appointment of a Frenchman to oversee European banking.
The UK prime minister and French president are talking before a summit of European Union leaders in Brussels.The UK prime minister and French president are talking before a summit of European Union leaders in Brussels.
It will be the first time they have met since Mr Sarkozy appeared to boast that Michel Barnier's appointment was a defeat for UK free-market economics.It will be the first time they have met since Mr Sarkozy appeared to boast that Michel Barnier's appointment was a defeat for UK free-market economics.
Earlier, Mr Brown and Mr Sarkozy issued a call for financial reform.Earlier, Mr Brown and Mr Sarkozy issued a call for financial reform.
This came in a jointly written article in the Wall Street Journal, in which they said that a one-off tax on bank bonuses should be "considered a priority".This came in a jointly written article in the Wall Street Journal, in which they said that a one-off tax on bank bonuses should be "considered a priority".
Diplomatic rowDiplomatic row
The talks between Mr Brown and Mr Sarkozy come two weeks after it was announced that Mr Barnier - a former French agriculture minister - would take the internal market post in the new 27-strong European Commission.The talks between Mr Brown and Mr Sarkozy come two weeks after it was announced that Mr Barnier - a former French agriculture minister - would take the internal market post in the new 27-strong European Commission.
We must ensure that through proper regulation, the financial sector operates on a level playing field globally Gordon Brown and Nicolas SarkozyWe must ensure that through proper regulation, the financial sector operates on a level playing field globally Gordon Brown and Nicolas Sarkozy
This position, which will give Mr Barnier responsibility for reforming the European banking sector, led to fears in the City of London that he might introduce excessive regulation that could stifle the decision-making freedom of UK banks.This position, which will give Mr Barnier responsibility for reforming the European banking sector, led to fears in the City of London that he might introduce excessive regulation that could stifle the decision-making freedom of UK banks.
Mr Barnier's appointment was said to have caused tension between London and Paris, not helped by Mr Sarkozy using a newspaper article to blame "Anglo-American" finance for sparking the crisis in the financial markets.Mr Barnier's appointment was said to have caused tension between London and Paris, not helped by Mr Sarkozy using a newspaper article to blame "Anglo-American" finance for sparking the crisis in the financial markets.
In the aftermath, a meeting due to take place last week in London between Mr Brown and Mr Sarkozy was cancelled.In the aftermath, a meeting due to take place last week in London between Mr Brown and Mr Sarkozy was cancelled.
Tony Travers, political scientist at the London School of Economics, said Mr Brown would probably be seeking assurances from Mr Sarkozy about Mr Barnier's plans.Tony Travers, political scientist at the London School of Economics, said Mr Brown would probably be seeking assurances from Mr Sarkozy about Mr Barnier's plans.
"Britain will continue to want to ensure that regulation of all kind, particularly regulation of labour market and financial services, is not damaged by Franco-European policy making," said Mr Travers."Britain will continue to want to ensure that regulation of all kind, particularly regulation of labour market and financial services, is not damaged by Franco-European policy making," said Mr Travers.
For his part, Mr Barnier has said he would work for the interests of the European Union as a whole. He has been invited to London by UK Chancellor Alastair Darling for talks and a tour of the City of London. Mr Barnier has said he will work for the interests of the European Union as a whole. He has been invited to London by UK Chancellor Alastair Darling for talks and a tour of the City of London.
The UK government has also said it is pleased that some of Mr Barnier's key advisers will be British.The UK government has also said it is pleased that some of Mr Barnier's key advisers will be British.
'Urgent need''Urgent need'
Mr Brown and Mr Sarkozy's joint newspaper article came after Mr Darling announced in Wednesday's pre-Budget report that a new one-off tax of 50% would be introduced on banking bonuses of more than £25,000.Mr Brown and Mr Sarkozy's joint newspaper article came after Mr Darling announced in Wednesday's pre-Budget report that a new one-off tax of 50% would be introduced on banking bonuses of more than £25,000.
In their article, the UK prime minister and French president said the financial crisis had made them "recognise that we are now in an economy which is no longer national but global, so financial standards must also be global". Reports on Thursday have suggested that the French government is considering a similar tax on the bonus payments made by French banks.
In their article, Mr Brown and Mr Sarkozy said the financial crisis had made them "recognise that we are now in an economy which is no longer national but global, so financial standards must also be global".
"We must ensure that through proper regulation, the financial sector operates on a level playing field globally," they said."We must ensure that through proper regulation, the financial sector operates on a level playing field globally," they said.
They added that there was an "urgent need for a new compact between global banks and the society they serve".They added that there was an "urgent need for a new compact between global banks and the society they serve".
"A compact that ensures the benefits of good economic times flow not just to bankers but to the people they serve; that makes sure that the financial sector fosters economic growth."A compact that ensures the benefits of good economic times flow not just to bankers but to the people they serve; that makes sure that the financial sector fosters economic growth.
"People rightly want a post-crisis banking system which puts their needs first. To achieve that, nothing less than a global change is required.""People rightly want a post-crisis banking system which puts their needs first. To achieve that, nothing less than a global change is required."