European Trade Union Confederation (ETUC)

António Horta-Osório, the head of Santander UK, is to become the new chief executive of Lloyds Banking Group on an £8m a year pay package . He will receive a basic pay of £1.035m, and an annual bonus of up to £2.33m. He will also be eligible for a payment of up to 420% of his salary, linked to targets that could see him collect about another £5m, bringing the total up to £8.3m (9.8m euro). This is happening in Lloyds, a bank that in 2008, at the height of the financial crisis, was one of the biggest beneficiaries of the £37bn British government injection of public money in the banking system. This comes when thousands of people are losing their jobs at Lloyds.

The proposals made by the Committee of European Banking Supervisors (CEBS) appear to go beyond the G20 rules, introducing stricter thresholds on bonuses. The main concern of the French banks, in this regard, who dislike these proposals intently, is the risk of distorting competition between banks in Europe, Asia and the United States, thereby increasing the likelihood of outsourcing.

At a time when European governments, including the British, are approving harsh austerity packages, directors of FTSE 100 (100 most highly capitalised UK companies listed on the London Stock Exchange) saw their total earnings soar by an average of 55%.

Before being elected Prime Minister of the United Kingdom, David Cameron referring to the crisis tackling the crisis famously said “we are all in it together”. Bart Becht of global consumer goods company Reckitt Benckiser took home £92.6m while workers there only saw an increase of 2% in their pay this year.

The average FTSE 100 chief executive took home £4.9m in total earnings in the year to June. That is at least 200 times the average pay of full-time workers.

HSBC, the global financial services company, has found its own way to comply with new EU-wide regulations likely to be finalized before the end of the year. To get around tightening rules on bonus payout, HSBC plans to double bankers basic pay and proportionally reduce bonuses. Clever but unfair.

According to the Centre for Economics and Business Research (CEBR) bonuses for bankers in London, Europe’s N°1 financial centre, are expected to rise every year in the period 2010-2014.

British Banks assume that the City accounts for about 2.4% of the national economy and losing London’s position among the world’s pre-eminent financial capitals would come at an enormous cost. Banks are clearly saying that tighter caps on bonuses and higher taxes imposed by the government would potentially divert new investment elsewhere in the world. The real problem is that bankers’ pay, even capped or taxed, far exceeds the incomes of millions of people that are struggling on a daily base against unemployment, mortgage payments and cuts in public services.

The British Bankers Association (BBA), facing public anger on scandalous bonuses, has stated that “Outside the UK, the concern on bonuses is limited or doesn’t exist at all”, and argued that any set of international rules on the subject should not penalize British Banks. Regrettably for them, workers across Europe are monitoring what is happening all around Europe on shameful bonuses in crisis and austerity times, and any attempt to minimize or get around the problem will not divert people’s attention.

Despite the crisis and the proposals to limit excesses through new rules and taxation, the majority of bankers in Europe and internationally expect their 2010 bonuses to be higher than their 2009 ones. “Business as usual”.

While Irish citizens will bear the burden of the big austerity package required for the EU and IMF-led bailout, three of the country’s bust banks (AIB, Bank of Ireland and Anglo Irish Bank) have between them awarded themselves over €70m bonuses and pay increases since last year.

Stephen Hester, chief executive of The Royal Bank of Scotland, is going to receive a possible bonus of £2.4m and his colleagues’ Peter Sands of Standard Chartered could go up to £3.2m

Anglo Irish Bank – the bank that contributed more than any other to Ireland’s demise – increased pay by 5% to staff in 2009 and has paid bonuses to 15 employees since January last year.

Eric Daniels of Lloyds, John Varley of Barclays and Micheal Geoghegan of HSBC are leaving the top slots of chief executive next year. Respectively, they are going to receive bonuses of £2.3m, £3m and £5.6m.

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