The economic and monetary affairs committee has a busy meeting to look forward to on Monday 14 May when its members will look at how to make finance work for the benefit of the society as a whole. Not only will the committee vote on measures that limit bankers' bonuses and demand that banks lend more prudently, it will also decide on stricter surveillance of eurozone countries' budgets.
Capital requirements directive
The capital requirements directive is about limiting bankers' bonuses and strengthening banks. According to a report by the European Banking Authority, some bankers take home 10 times their base salary thanks to bonuses. Austrian Christian Democrat Othmar Karas, who is responsible for steering the proposal through Parliament, argues that the bonus should not exceed the equivalent of one year's salary.
The new directive will also require banks to strengthen their capital in order to be better able to withstand losses and provision themselves with adequate liquidity.
The two-pack initiative is about ensuring budgetary discipline and protecting member states in trouble. It would involve all eurozone countries presenting their draft budgets to the European Commission at the same team each year. The Commission could then demand revisions to the budgets if they are not compliant with the Stability and Growth Pact. Portuguese Social-Democrat Elisa Ferreira is responsible for steering the proposal through Parliament.
The initiative also focuses on bankruptcy protection for member states in financial difficulties. Any country affected should not be declared in default, but their credit rating should be frozen. A plan to repay the debt could then be presented to the Commission. French Christian Democrat Jean-Paul Gauzès is responsible for steering this proposal through Parliament.