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Brown, Sarkozy seek to end EU row EU bonus tax plan gains momentum
(about 9 hours later)
British Prime Minister Gordon Brown and French President Nicolas Sarkozy have issued a joint call for urgent global reform of financial markets. Momentum is building for a tax on bankers' bonuses as European leaders gather for an EU summit in Brussels.
The joint letter comes ahead of talks on the sidelines of an EU conference, where they will try to brush off a row over an EU appointment. The leaders of France and Germany have swung behind the idea after the UK announced a one-off supertax on banker bonuses in a pre-Budget report.
Mr Sarkozy appeared to boast that a Frenchman's appointment to oversee European banking was a British defeat. The two-day summit will also address climate change and financing.
The EU summit will also address climate change and financing. The European Council's meeting is the first since the Lisbon Treaty came into effect and Belgium's Herman van Rompuy was elected as its first president.
Mr Brown and Mr Sarkozy had cancelled a meeting scheduled to be held last week, amid speculation of a row over EU posts. Ahead of the summit, UK Prime Minister Gordon Brown and French President Nicolas Sarkozy held talks which were expected to cover the controversial appointment of a Frenchman to oversee European banking.
Mr Sarkozy had told Le Monde newspaper the British were "the big losers" in the share-out of EU jobs after former French agriculture minister Michel Barnier was given the role of supervising Europe's internal market for financial services, most of which is in the City of London. Meanwhile, amid concerns across the continent about Greece's enormous level of debt, Prime Minister Fredrik Reinfeldt of Sweden, which currently holds the EU presidency, said the country's financial problems should be solved domestically.
'No fuss' Greece's Deputy Finance Minister Philippos Sachinidis said earlier his country's debt stood at 300bn euros ($442bn; £272bn) - its highest level in modern history.
But European diplomats tried to brush rumours of a disagreement between the two leaders to one side. Call to arms
"I think it'll be fine. In two years, you'll be wondering what the fuss was about," one unnamed source told Reuters. Writing in Thursday's Wall Street Journal, Mr Sarkozy and Mr Brown said a one-off tax on bank bonuses should be "considered a priority".
Mr Brown's spokesman too said the meeting had a broader agenda than fixing bruised ties. There was a brief drama as Greenpeace activists breached security
"It's not specifically focused on any one issue. There are lots of things going on," he said. It was "simply not acceptable" for taxpayers to cover the cost of bank failures but not benefit from their successes, they said.
In a show of unity ahead of the talk, the leaders issued a joint call for the urgent global reform of financial markets.
People rightly want a post-crisis banking system which puts their needs first Sarkozy/Brown joint article Climate pressures cloud EU summit EU climate package explained France gets key Commission job
Writing in the Wall Street Journal, they say a one-off tax on bank bonuses should be "considered a priority".
The two leaders say it is "simply not acceptable" for taxpayers to cover the cost of bank failures but not benefit from their successes.
The BBC's Jonny Dymond, in the Belgian capital, says the joint article at times reads like a call to arms.The BBC's Jonny Dymond, in the Belgian capital, says the joint article at times reads like a call to arms.
In it, Mr Sarkozy and Mr Brown say the financial crisis has made them "recognise that we are now in an economy which is no longer national but global, so financial standards must also be global". In the letter, Mr Sarkozy and Mr Brown said the financial crisis has made them "recognise that we are now in an economy which is no longer national but global, so financial standards must also be global".
Banker focus They said there was an "urgent need for a new compact between global banks and the society they serve".
"We must ensure that, through proper regulation, the financial sector operates on a level playing field globally." People rightly want a post-crisis banking system which puts their needs first Sarkozy/Brown joint article class="" href="/2/hi/europe/8405099.stm">Climate pressures cloud EU summit class="" href="/2/hi/europe/7765094.stm">EU climate package explained class="" href="/2/hi/europe/8382404.stm">France gets key Commission job
Michel Barnier's appointment caused a UK-France spat
They say there is 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."
Various proposals to reform the sector "deserve examination", they said, but a one-off tax on high bonuses paid to bankers "should be considered a priority".Various proposals to reform the sector "deserve examination", they said, but a one-off tax on high bonuses paid to bankers "should be considered a priority".
"People rightly want a post-crisis banking system which puts their needs first. To achieve that, nothing less than a global change is required," the leaders wrote. UK Chancellor Alistair Darling said in his pre-Budget report on Wednesday that the new supertax would be paid by banks and not individuals.
The meeting comes as the UK finance minister Alistair Darling announced a one-off supertax on banker bonuses in a pre-Budget report on Wednesday. It is designed to discourage institutions from paying large bonuses to employees in the wake of the major taxpayer support they have received in the financial crisis.
The new tax - which would be paid by banks and not individuals - is designed to discourage institutions from paying large bonuses to employees in the wake of the major taxpayer support they have received in the financial crisis. The plan has been warmly received in Paris and Berlin. German Chancellor Angela Merkel described it as an "attractive idea", while a French finance ministry official was quoted as telling the Associated Press news agency that France had already decided on a one-off tax for 2009 bonuses.
Big losers
Ahead of his meeting with Mr Brown, Mr Sarkozy had appeared to boast that a Frenchman's appointment to oversee European banking was a British defeat.
The leaders say only global change will restore confidence in banking
He told Le Monde newspaper the British were "the big losers" in the share-out of EU jobs after former French agriculture minister Michel Barnier was given the role of supervising Europe's internal market for financial services, most of which is in the City of London.
There was a moment of drama as EU leaders arrived for the twice-yearly Brussels summit as environmental protesters breached the security cordon disguised as an official delegation.
Several Greenpeace activists pulled up in a silver minivan similar to those used by summit attendees.
They burst out with banners reading "EU: Save Copenhagen" before they were moved aside by security guards.
They were urging EU nations to boost their commitments to achieve success at the ongoing global climate change conference in the Danish capital.