European Union leaders are to hold an extraordinary summit on September 17 to iron out their differences ahead of a Group of 20 meeting in Pittsburgh on reforming global finance, Swedish Prime Minister Fredrik Reinfeldt said Friday, according to dpa. "The G20 will be a substantial meeting ... therefore it is very important to coordinate a European position," since not all 27 EU countries will be attending those talks, Reinfeldt said at a briefing in Stockholm. The dinner-time informal EU summit in Brussels will take place exactly a week before heads of state and government from the world's 20 most important economies convene in Pittsburgh. The European participants of that meeting are Britain, France, Germany, Italy - and Sweden, in its capacity as current holder of the EU's rotating presidency. Spain and the Netherlands gained an invitation to the previous G20 summit in London on April 1-2, and its leaders were again expected to attend the September talks in the United States. The aim of the Pittsburgh meeting is to discuss ways of restoring confidence in financial markets in the wake of a credit crunch, which has lead to the EU suffering from its worst recession in decades. Reinfeldt said bankers' bonuses would also feature prominently on the Pittsburgh agenda. "We have seen a tendency to go back to the same kind of bonus systems that we saw before the financial crisis hit the world," Reinfeldt said. "We don't want to see a situation again whereby excessive risk- taking ends up being a problem for taxpayers when it goes wrong, and goes into the pocket of those working in the financial sector when it goes right," the premier said. The Swedish presidency is eager to avoid the mistakes of last autumn, when powerhouses such as France and Germany infuriated their smaller EU partners by excluding them from talks when the financial crisis first hit Europe. "That created a lot of tension and nervousness in the smaller economies. We also have voters, we also have a situation we need to react to," Reinfeldt said. Britain, which is to host a preparatory G20 meeting over the weekend, has expressed concern that any curb on bonuses could lead to an exodus of top managers from the City of London. Asked about British resistance to stricter rules, Reinfeldt said "good regulations that make financial markets work better globally" would also be good for Britain. "Let's look at fewer but better functioning regulations, rather than many regulations that we are not sure will do their job. I hope that will also be the position of the City of London," Reinfeldt said. The premier also pointed to a joint letter he received this week from German Chancellor Angela Merkel, French President Nicolas Sarkozy and British Prime Minister Gordon Brown proposing a strong link between executive pay and the performance of banks. "Gordon Brown signed this letter ... specifically mentioning bonuses. So I think there is an understanding that it is also important for the United Kingdom," he said. On Friday, the Swedish daily Dagens Nyheter published a separate letter penned by seven EU finance ministers calling for guaranteed bonuses to be restricted to just one year. The payment of bonuses should also be spread over a number of years, while variable pay should in any case reflect the individual's and the bank's long-term performance, said the ministers of Sweden, Netherlands, Luxembourg, France, Spain, Germany and Italy. The letter did not carry the signature of British Chancellor Alistair Darling, however. The G20, which also includes the United States, Canada and major emerging economies such as India and China, represents around 90 per cent of global gross national product.
