BRUSSELS: EU governments on Tuesday delayed a decision to introduce controversial bank bonus caps after Britain, partly backed by Germany, sought adjustments in extra-time negotiations.
Finance ministers agreed to take a final look over the rest of the month at plans to cap bonuses at the same amount as is paid in a fixed annual salary, or twice that sum if shareholders approve the payment.
British Finance Minister George Osborne told his peers during a public debate that "we can't support the proposal currently on the table."
However, he added, that "if we make progress in the next couple of weeks I would hope that the finance minister of the largest financial centre in Europe can support (an amended legislative text) wholeheartedly."
The European Parliament is to vote in April on the accord, drawn up with the Irish EU presidency to introduce internationally agreed rules to beef up banks' capital and make them better able to withstand future crises.
Parliament insisted however that the bonus cap be added to satisfy public anger over incentives seen as exorbitant in a time of recession and massive job losses.
The new regulations called Basel III primarily tighten up bank capital requirements. They were due to take effect this January but next year now seems the most likely.
French Finance Minister Pierre Moscovici on Monday described the bonuses move as a "moral crusade" which should apply to all, including Britain.
Home to some three quarters of the EU's finance industry, London has long maintained that bonus and salary caps would make Europe's banking sector uncompetitive.
Osborne, however, told his counterparts that he accepted and understood public anger at the exorbitant remuneration blamed for bringing banks and then governments to their knees in the last five years.
Osborne said Britain was "absolutely clear that more and more of the pay paid to bankers should be tied to long-term performance."
He pleaded that "bonuses in London are today 80 percent less than at the height of the irresponsibility in the banking system."
And he warned that the EU plans would leave taxpayers exposed once more.
"It will push salaries up, it will actually make it more difficult to claw back bonuses when things go wrong," Osborne said.
An official said that negotiations would now centre on how to steer permissible incentives more towards the long-term, with extra safeguards enabling "clawbacks" if a banker's performance falls short.
Osborne won crucial backing during the meeting from German Finance Minister Wolfgang Schaeuble, who said the "broad concensus" of support around the table was adequate but not sufficient.
Schaeuble said he did not want to isolate London in another back-to-the-wall vote, although he cautioned that "the room for changes is limited," and would be focused on deferring part of the bonuses that could then be excluded from the cap.
He said Britain was in "a difficult interior phase" politically, and the agreement had to be nuanced so as to avoid "strengthening those that want to exit the EU."
Parliament head Martin Schulz said that despite Britain's "severe difficulties" with the new framework, "the EU must press ahead and get this important legislation on the statute book."
Talks chair Michael Noonan of Ireland concluded the discussions by saying: "We will try to iron these out in the coming weeks."
Some argued for no delay with Sweden's Anders Borg, frequently a close ally for London, saying countries that want to go ahead sooner should be allowed to "jump the gun."
Elsewhere at the talks, EU Economic Affairs Commmissioner Olli Rehn welcomed Latvia's formal application to become the 18th country to take up the euro in January next year.
He said that a European Commission report on Riga's euro readiness would be drawn up by June, adding that a permanent commitment to "sound policies" as agreed among partners in Brussels was paramount.
Ministers also invited the International Monetary Fund, European
Central Bank and European Commission the Troika of bailout lenders to come up with their "best offers" on extending the maturities on rescue loans made to Ireland and Portugal as part of efforts to help them return to the money markets for financing.
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