As part of our month’s focus on money and debt, this powerful article is written by Peter Allen, one of our candidates from Derbyshire, East Midlands, looking at Banker’s Bonuses in the light of national and international crisis:
With living standards in decline, a million young people unemployed, a crisis in the NHS and social care, and rising levels of poverty and homelessness, whose interests might the government be trying to defend (at public expense) in the European Court ? … why bankers of course!
A few years back, after the financial crash, largely caused by irresponsible behaviour by greedy bankers trying to line their own pockets, all politicians joined in the chorus of popular anger against them. Cameron and co accused Labour (with some justification! ) of allowing bankers bonuses and pay levels to get out of hand.
It was a sentiment that spread across Europe ( although in truth the amount of bonuses paid out in London was far higher than elsewhere in Europe) and has led to a new regulation ( agreed by all the other governments but being legally challenged by the UK ) which caps the bonuses payable to bankers. The cap is pretty generous (100% of their huge salaries or 200% “if shareholders agree”) but is being opposed by Cameron and co who argue that “it will just mean banks increase basic salaries instead”.
Perhaps the UK government is actually injecting a reality check, knowing that financial institutions are highly skilled in getting round regulations? Certainly the evidence of the last few years is that, having been bailed out by European taxpayers, they intend to carry on “business as usual”, making speculative decisions in the interests of short term gain, rather than investing for the long term benefit of Europe and the world.
The Green Party was not against injecting public money to stabilise financial institutions after the crash of 2008. but it said then, and it says now, that the bailout should not have been unconditional, allowing banks and bankers to continue to behave as previously. Rather public money should have been used to invest in a transformation of our energy supply, transport infrastructure and housing stock, creating decent jobs and starting to seriously address the imminently devastating impact of climate change.
In order to ensure the above banks will have to be properly regulated. This will require agreement at international level by governments committed to real reform. The election of such governments will require the creation of popular movements for radical change, across Europe and beyond, to challenge austerity and promote greater equality. Green MP Caroline Lucas, speaking to New Internationalist magazine in advance of the launch of the People’s Assembly earlier this year, summed it up
” It was an international banking crisis and this is an international crisis-and although each country has very different circumstances international solidarity and working together is absolutely crucial. Capitalism is international and people’s movements need to be international as well”