Last week, the European Commission (EC) slapped itself on the back a few times, with a congratulatory speech about all the things it has done since 2008 to repair the immense damage done to the economy by the financial services industry. EC President José Manuel Barroso claimed the financial services industry as one of Europe’s greatest assets as well a listing various achievements including the banker bonus cap, increasing reserves, scrutinising hedge funds, rating agencies, and improving consumer protection.
My initial thought was something about horses running amok in meadow and Barroso and his pals carefully closing the gate. But then, credit where it is due, some action on behalf of the EC is better than nothing done to rebalance the inequalities exploited by the financial services sector which allowed institutions and individuals to pay themselves ridiculous bonuses, make opaque trades and leave consumers exposed to the risks of actions taken by others.
The bonus cap confusion
Back in March, when the EC announced its plans to curb the excessive bonuses paid to certain employees of the banking industry, the UK released its strategy for getting around the rule. The EC rule limits a bonus to no more than the fixed salary, or twice that level if approved by the bank’s shareholders, and will affect 2014 awards to be handed out early next year. In response to the new law HSBC, the world’s local money launderer, announced that it will give new “allowances” – expected to take the form of monthly or quarterly payments in cash or shares – to senior staff to boost their fixed pay, meaning that higher bonuses could then be awarded. The same bank has, however, opted to cut its Chairman’s proposed GBP3.25m bonus to a measly GBP1m. UK institutions Lloyds and Barclays indicated they would also seek a way around the bonus cap. The UK Government opted to fight the EU’s bonus cap in court and started a legal challenge against the EU, which it lost.
While the UK government sent a strongly worded letter to banks in April, warning them to cut bonuses or face tighter controls, banks have retaliated with a complaint that they will lose their competitive edge in the search for talent and fear the best candidates might all take jobs in the US instead. At least the UK managed to show some mettle and stop the 200 per cent bonuses that RBS – now owned by the UK government since its spectacular bail out in 2008 and 2009 – had scheduled to pay some employees.
Other great assets of Europe
Here is a list of some other great European assets, at least in my opinion. Would you agree?
The annual paean to the much maligned European pop-song which unites the world for one night a year in awe of this astounding show, and the ever more outlandish performers. Congratulations to Conchita Wurst, the Austrian bearded drag act who won 2014’s content. Her ‘Rise Like a Phoenix’ is no ‘Waterloo’ but the public vote for a champion of tolerance was one in the eye for the countries who have decided to outlaw and punish anything that falls out of the boundaries of heterosexual acts for procreation. I am looking at you India, Nigeria, Russia, Tanzania, Sierra Leone, Uganda, for starters. Iran, Mauritania, Saudi Arabia, Sudan and Yemen have made homosexuality punishable by death.
The European Southern Observatory, Chile.
Since five European countries signed the ESO convention in 1962, researchers have discovered that the universe is expanding and accelerating as it gets bigger, earning Nobel Physics Prizes for the lead discoverers. They have discovered an Earth sized planet in the star system next door, made the first accurate measurements of the planet Pluto and its moon Charon and found the biggest star ever, see image right.
The sadly missed late-night satirical magazine show presented by Antoine de Caunes and Jean-Paul Gaultier, hamming up the French accent for ze British viewerz. The show shed light on some less well known aspects of European life, generally making a mockery of the entire system and reminding us not to take it all so seriously. The term Eurotrash has been used to describe those perceived to be ‘arrogant, lower-class, expatriates’ living in New York. NSFW in the slightest.
The Eisriesenwelt (German for “World of the Ice Giants”) in Austria is largest ice cave in the world, extending more than 42km (26 miles). The Skocjan cave system in Slovenia includes the highest cave hall in Europe. Or what about the cave paintings at Lascaux in France, a humble message to the future sent by human beings more than 17,000 years ago.
CERN – the European Centre for Nuclear Research
Where to begin? The biggest particle physics lab in the world has worked continuously to solve some of the biggest mysteries of the universe. On the way, its researchers invented the world wide web in 1989, created stable atoms of antimatter in 2010 and brought us closer to understanding our existence by discovering the Higgs boson in 2013 resulting in Nobel Prizes for the lead researchers. CERN is 60 this year, celebrating science for peace is its anniversary strap line.
Honourable mention for achievements in the European Financial Services Sector
The EC has done one thing that this European Union citizen considers worth an honourable mention in this list. It now allows me to transfer funds free of charge between my bank in the UK and other banks in the Single European Payments Area. Steps like this have a impact on consumers; it saves them money. This took years to devise and implement when it could have changed retail banking a long time ago. Everything else on Barroso’s list will take a long time to touch the consumer population.