Britain, France united on new banking rules ahead of a streamlined EU summit

Brown, Sarkozy united on new banking rules

BRUSSELS — British Prime Minister Gordon Brown and French President Nicolas Sarkozy presented a united front Thursday, agreeing that executive bonuses should be taxed more ahead of the European Union’s first streamlined summit.

The leaders co-wrote an article in the Wall Street Journal appealing for “a new compact between global banks and the society they serve.”

The Brown-Sarkozy byline appeared to heal a rift in Anglo-French relations that opened over the appointment last month of Frenchman Michel Barnier to oversee EU financial markets, including the City of London, a powerhouse of world finance.

Sarkozy had proclaimed victory over Barnier’s appointment and denounced “Anglo-American” finance methods for causing the global economic meltdown. British bankers responded angrily, and the dispute reportedly scuppered a Sarkozy-Brown meeting in London last Friday.

But on Thursday they agreed “we must ensure that through proper regulation, the financial sector operates on a level playing field globally.” The two said executive bonuses, which have come to symbolize corporate excess, should taxed more, and that “should be considered a priority.”

Sarkozy and Brown are meeting in Brussels later Thursday before joining the EU’s other 25 leaders to further smooth over disagreements.

The two-day summit ushers in a new era for the EU, with leaders for the first time without their usual armies of advisers to thrash out two key issues — climate change and international banking supervision.

“They will not sit in a room that is a huge circle where you hardly can see each other and have to have a pair of binoculars,” said a high-level EU diplomat. “Only they will sit there, nobody else.”

The diplomat spoke on condition of anonymity.

The new regime stems from the Lisbon Treaty, which entered force this month, bringing new rules to accelerate decision-making.

There is no better issue to help the bonding than climate change. After clashing on everything from the war in Iraq to agriculture policy, the EU stands largely united on tackling global warming.

“There is no question that the activities of Europe have moved the global agenda forward,” said Swedish Foreign Minister Carl Bildt.

The summit is expected to agree to a multibillion dollar fund to help developing nations meet pollution reduction targets and tackle the effects of climate change, a move aimed at the ongoing climate talks in Copenhagen.

So far, Britain says it would contribute $1.3 billion over three years to help poor nations adapt to climate change, Sweden says it will give €800 million ($1.2 billion) but other countries have yet to give specific numbers.

The EU has already pledged to cut greenhouse gas emissions by 30 percent by 2020 instead of the 20 percent offered up to now, if other major polluters make comparable offers.

The EU summit could also push for a new tax on financial market transactions to help poor countries with climate change. Brown and French Foreign Minister Bernard Kouchner have both pushed for that and are hoping to get all 27 EU nations on board at the summit.

“Britain is traditionally skeptical of EU policies, but is in fact quite close to France and Germany on environmental issues,” said Tony Travers, political scientist at the London School of Economics.

Incoming president Herman Van Rompuy will attend Thursday’s dinner of the government leaders, but has no official role at the summit.

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AP writers Mike Corder in Brussels, Angela Charlton in Paris, Geir Moulson in Berlin and Meera Selva in London contributed to this article.