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MEPs demand ‘no backward steps’ over bonus cap

MEPs say they will veto the European Commission’s candidate to lead on financial services policy unless they commit to stopping banks avoiding the strict bank bonus cap.

Under European rules bank bonuses will from next year be capped at 100 per cent of salary unless shareholders give their approval for them to be higher, when they can be raised to 200 per cent of salary.

But according to the Financial Times banks have introduced ways of getting around the rule and Socialist MEPs are threatening to block the appointment of a new European policy chief unless they stop them.

The Socialist leader in the European parliament Gianni Pittella told the paper that “role based allowances” being put together by banks to avoid the cap are a “provocation” and that his group, the second largest in the parliament, would not accept any “backward steps” on the cap.

He said: “The use of allowances to sidestep the cap is a provocation. If you are part of the EU you must apply the same rules as any other member state.

“The next commissioner on financial services must be crystal clear on this, otherwise we will reject the candidate.”

Each of the EU’s 28 member states put forward a candidate to be a commissioner. European Commission president Jean-Claude Juncker is then responsible for appointing each one a brief.

The UK is currently engaged in legal action with the EU at the European Court of Justice in an attempt to block the bonus cap, arguing that it violates EU treaties.

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