Anders Borg, finance minister of Sweden – the country currently holding the rotating presidency of the European Union – has called for an end to the "bonus culture" among bankers.

He made the call as EU finance ministers met on September 2 2009 to come up with shared stances on issues to be debated at the September 2009 G20 summit in Pittsburgh in the United States.

Finance ministers are considering how to start winding down trillions of dollars in government stimulus funds that have saved the world's economies from collapse, voanews said on September 2.

Economic officials from the G20 are meeting in London on September 3 and 4 to discuss this and other issues ahead of the G20 summit in the United States later this month.

The G20 is made up of Australia, Argentina, Brazil, Britain, Canada, China, Chile, France, Germany, India, Indonesia, Italy, Japan, Russia, South Africa, South Korea, Saudi Arabia, Turkey, the United States plus the EU.

G20 governments are calling for a co-ordinated exit from the emergency stimulus measures, voanews said.

At their meeting in London, finance ministers also are expected to support actions to reduce bonuses paid to bankers.

Critics say these bonuses encourage risky bets that hurt companies and the economy and were a key reason the economic crisis grew so bad so quickly.

At the September 2 informal finance ministers’ lunch meeting in Brussels, ministers of finance from the 27 EU member states agreed on common EU positions on the key issues to be discussed at the upcoming G20 meetings in London and Pittsburgh, including financial market reform, strengthening international financial institutions, and combating climate change.

Borg, who chairs the Ecofin Council during the Swedish Presidency of the EU, expressed his satisfaction at the outcome of the September 2 meeting.

"This meeting has paved the way for further progress. For example, we must prevent the re-emergence of the bonus culture. This question will be addressed at the Pittsburgh G20 meeting, at which point it must be stopped"

The ministers said that recent developments in the financial sector show that a "risky and harmful bonus culture" still prevails.

The ministers who took part in the meeting said that sound compensation practices – where bonus payments are linked to long-term performance and excessive risk-taking is minimised – must be established.

The EU is urging G20 countries to commit to efficient measures towards banks not complying with the FSB Principles for Sound Compensation Practices in financial institutions.

The EU finance ministers reaffirmed the commitment made by the EU at the London Summit to increase the resources available to the International Monetary Fund.

"Building on the European Council conclusions, EU member states in principle stand ready to take their share of further financing needs, as they arise over the medium term, in line with their economic weight," a statement after the Ecofin meeting said.

Borg said that, having established common positions in these crucial areas, "the EU can now contribute decisively and constructively to the G20 meetings, which will hopefully advance the agenda on financial sector reform, improved remuneration schemes, and climate change negotiations."

The BBC said on September 3 that UK chancellor of the exchequer  Alistair Darling had said that G20 nations must continue spending to ensure the global economy returns to sustainable growth in 2010.

Germany and France want G20 nations to discuss "exit strategies" from the measures used to stimulate economies at a G20 finance meeting this weekend.

But Darling told the Independent: "The biggest single risk to recovery is that people think the job is done".
 

Britain also says a French plan to cap banker bonuses would be "unworkable", the BBC said.