Osborne losing the fight against bank bonus cap

The second day of the Eurozone finance ministers’ meeting in Brussels opened with a discussion on limiting bonuses for bankers to 100% of basic salary. British Chancellor George Osborne is almost alone in his resistance to the move.

The European Comission’s provisional proposal to restrict bankers’ bonuses, aimed at preventing an outbreak of another crisis such as the mortgage meltdown of 2008, was issued last week and encountered an immediate opposition from British officials. They main worry is that the bonus cap would have a adverse effect on the competitiveness of the City of London as a global financial center.

Germany, Sweden and the Netherlands, on the support of which the UK was counting, have already backed the proposal. France is the most persistent in its effort to push it through. Yesterday French Finance Minister Pierre Moscovici said: “Everyone must live with what is on the table. I told George Osborne, when I was in London, these moral rules apply to everyone, even the City.”

The Eurozone finance ministers are also expected to discuss extending the maturity of bailout loans for Ireland and Portugal.