Eurogroup wants to tax "scandalous" corporate bonuses
Eurozone finance ministers on Tuesday turned against what they called "scandalous" bonuses and golden hand-shakes, received by some of Europe's top managers at a time when ordinary citizens are increasingly struggling to make ends meet, dpa reported.
Ministers also vowed to look at ways of fighting inflation, which along with slow growth has emerged as the biggest threat to their economies.
Such measures should include structural reforms, avoiding public-sector wage hikes that do not reflect improvements in productivity, and a possible review of the European Union's Common Agricultural Policy (CAP).
Addressing the issue of excessive corporate bonuses, Luxembourg Prime Minister Jean-Claude Juncker, who chairs the regular euro-area meetings, said that ministers were considering hiking taxes to limit what he dubbed a "scandal" and "social scourge."
"It is no longer acceptable to have situations whereby certain top managers have excessive salaries and also benefit from golden parachutes, payments which have no relationship to their performance," Juncker said.
"We are aware of the huge gap between our continued appeal for wage restraint and the continued existence of these excesses, particularly in respect to golden handshakes, and we are examining fiscal instruments that may be brought into play to combat such excesses."
Any move aimed at curbing salaries or bonuses granted to captains of industry is likely to be met with strong resistance by member states such as Britain, which fears that it might pose a threat to the City of London by pushing businesses to relocate.
British diplomats said ahead of Tuesday's meetings that they believed there was "zero appetite" within the EU for such initiatives.
Much of the talks focussed on inflation, which in the 15-member eurozone reached a peak of 3.6 per cent annualized in March on the back of rising food and fuel prices, before falling slightly to 3.3 per cent in April. Among the strategies put forward by Joaquin Almunia, the EU's economic and monetary affairs commissioner, is a possible reform of the CAP.
"For the weakest sector of our society, inflation is the main problem. They are suffering a loss of purchasing power and must pay more for food and other necessary goods," he said.
"We should consider whether we can improve the functioning of our Common Agricultural Policy."
In a common statement, ministers did not make any explicit reference to the CAP but referred to the need to increase supply "in the relevant sectors."
The CAP, a complex and expensive system of subsidies designed to protect farmers' incomes, has often been blamed for keeping European food prices artificially high.
The EU executive, the commission, is expected to submit proposals later this month aimed at reforming the CAP.
But such proposals are likely be met with fierce resistance from big beneficiary countries such as France, which is due to assume the six-month rotating presidency of the EU on July 1.
Addressing reporters after the meeting, French Finance Minister Christine Lagarde said scrapping the CAP was "not the right approach."