Sarkozy threatens walk-out if no progress made on bonuses at G20 summit

The Elysée Palace has today announced that French President, Nicolas Sarkozy, may walk out of the G20 summit in Pittsburgh next week unless an agreement is reached with regard to bank bonuses.

France has long been arguing that excessive bankers’ bonuses reward the risk-taking that led to the financial crisis.

At last week’s meeting of G20 finance ministers, France proposed a series of mandatory caps but it was rejected by other ministers, with UK Chancellor Alistair Darling dismissing them as “unenforceable”.

Instead, the G20 group of leading economies agreed to a new set of regulatory measures to require banks to disclose the pay and bonuses of their highest-paid employees.

Furthermore, it was agreed that bonuses will be “clawed back” if an individual takes unnecessary risks or should the deal collapse within a three-year period.

However, the French Government refused to back down and is still adamant about its proposals to cap bonuses.

In an interview on RTL Radio, Claude Gueant, the secretary general of the Elysee, said: “There must absolutely be an agreement to make things change and the president is absolutely determined on that score.”

Mr Gueant was asked if that meant a walk-out and he responded: “This possibility must be taken seriously.”

However, Mr Sarkozy has been quoted by le Figaro newspaper as saying: “If there is no concrete decision at Pittsburgh, I will leave.”

A the G20 summit in London in April, Mr Sarkozy had threatened to walk out of the meeting unless an agreement was reached with regard to clamping down on tax havens.

Next week’s G20 summit, to be held in Pittsburg on September 24 and 25, will focus on tightening global financial regulation.

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