EU officials to press US on bonuses

BRUSSELS — The U.S. is set to face renewed pressure from the EU on Thursday as the bloc's 27 leaders meet to draft a strategy to push President Barack Obama to cap bankers' bonuses and make a bigger effort on an ambitious climate change pact.

The European leaders are scheduled to huddle over a working dinner later Thursday to lay out a joint strategy ahead of a summit of rich and developing countries in Pittsburgh, Pennsylvania, on Sept. 24-25.

EU spokesman Johannes Laitenberger told reporters the EU leaders will "exert pressure to make sure" proposals agreed to between the Group of 20 countries "are fully implemented."

EU nations want G-20 countries to threaten sanctions on banks that pay excessive bonuses to executives and traders as part of a sweeping overhaul of the global financial system. They say they need to end payment systems that can trigger reckless risk-taking.

"This is a key issue to ensure that we not only have smooth operating markets, but markets that are based on ethical principles," said Laitenberger. "We need both in place if we are to ensure sustainable confidence in the future."

They also want to step up pressure on the United States and China, the world's two biggest polluters, to tackle global warming and commit to cuts in global greenhouse gas emissions at climate change talks later this year in Copenhagen.

According to a draft statement to be issued by the EU leaders, the Pittsburgh summit should set binding rules for how banks reward employees.

It says the EU should also urge the U.S. and others to keep up stimulus programs that boost economic growth and the financial industry. EU leaders want to talk about exit strategies now to coordinate how governments should pay back massive public debt when their economies recover.

The U.S. doesn't share Europe's zeal to regulate bonuses or to talk about exit strategies. France is determined to make bonuses the key issue: President Nicolas Sarkozy has threatened to walk out of the G-20 talks if other nations don't strike a deal.

Swedish Prime Minister Fredrik Reinfeldt, whose country holds the EU presidency, said Wednesday that governments need to legislate because banks are going back to business as usual — and big bonuses — as economies shows signs of recovery.

Huge payoffs to bankers have become a hot-button issue on both sides of the Atlantic as governments stepped in with massive bailouts to prevent banks from collapsing late last year.