To coincide with the next round of George Osborne's legal challenge to EU controls on the worst excesses of the City bonus culture, Molly Scott Cato, Green MEP for South West England and a member of the European Parliament's Economic and Monetary Affairs Committee, has launched a stinging attack on the UK Chancellor.
Ms Scott Cato said: "In the wake of the most serious banking crisis for a century it is of deep concern to see the Chancellor resisting democratically agreed and entirely common-sense proposals to make banking less risky and to challenge the culture of excessive pay in Europe's financial services sector. The special treatment that Osborne has shown to the wealthy in general and financiers in particular is becoming almost legendary but this puts us all of risk of further financial instability and risk-taking for which we will be asked to pick up the tab."
The Green Party has long been critical of the moral hazard represented by the payment of large bonuses, which reward risk-taking by bank executives but leave the costs to be borne by the public when the deals go bad.
Her Green Group colleague Sven Giegold commented: "If you run to the court because you have lost the democratic argument, it’s a sign of the weakness of your argument. Nobody can deny that the bonus culture has contributed to the harm we have seen all over the world and, ironically, particularly in Britain. Osborne is wrong to suggest that the EU Parliament is acting beyond its competence. Although we have no general competence to regulate pay we do have the power to use regulation to protect financial stability and that is the purpose of the bonus cap."
The fight for the EU Cap on Bankers' Bonuses was led by Green MEPs Philippe Lamberts and Sven Giegold. It prohibits the payment of a bonus in excess of 100% of fixed pay. It will come into operation next year when it will apply to performance during 2014.