France and Germany back bank limits

Leaders talk on limiting bankers' bonuses ahead of G20 meeting in September.

    Merkel has lent her support to Sarkozy's policy of capping bonuses for traders [AFP]

    The G20 summit, of the leaders of the most powerful economies in the world, will be held in Pittsburgh, in the US.

    Financial control

    Al Jazeera's Jonah Hull said France and Germany were again trying to position themselves as the two countries that control European financial and economic policy.

    "This is another united front by France and Germany. We saw a similar thing before the G20 meeting in London in April.

    "The problem that they have is that they can't [make the changes] on their own.

    "They need the buy-in of the other G20 members, because they [France and Germany] worry that if they go it alone, they will alienate their own financial services sectors and send them off to more accommodating places like London, for instance."

    Hull said that the other major financial services sectors in New York and London were unlikely be receptive to the French and German position.

    "[The US and UK] also do not want to alienate their own sectors ... but more importantly than that, both these governments derive enormous tax revenues from the bonuses paid to bankers.

    "Germany and France will get it up the agenda - but they won't necessarily get consensus."

    Hull also said that even if France and Germany could gain agreement from other nations, such decisions would still need ratification in home countries, which would prove difficult.

    SOURCE: Al Jazeera and agencies


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