SP: Fortis rescue attempt 'unavoidable'

29 September 2008

SP: Fortis rescue attempt 'unavoidable'

"The attempt by the Dutch, Belgian and Luxembourg authorities to rescue Fortis was unavoidable,” says SP finance spokesman Ewout Irrgang in an initial reaction to developments surrounding the faltering bank. He wonders, however, why the Dutch state did not take a controlling interest in the firm's banking arm, rather than a 49% minority share.

Ewout IrrgangThe Netherlands has bought, for a total of €4 billion, 49% of the banking corporation of the troubled concern. “If we're putting so much public money into this,” says Irrgang, “why not take at least 51% of the banking activities? That would mean that we would have much more control of the corporation and over what happens to the public money.”

Irrgang is unhappy with the fact that the rescue operation could in effect reward the poor past performance of Fortis senior executives. “Now that a large slice of the concern is in state hands,” he says, “we need to start discussing the executives' salaries.”

Parliament will shortly debate the crisis in the banking world and the intervention of the Benelux countries, probably on Wednesday.

Measures needed against easy money and inflated bonuses

During the last few years the SP has argued time after time for measures to be taken to put a stop to a business culture of inflated bonuses and easy money. Concrete proposals were made designed to put a stop to perversely extravagant bonuses, the sort of bonuses which have led, in part, to the current credit crunch. Five proposals were brought forward last year to tackle greed in business: top salaries must be brought under the Netherlands' national wage bargaining system and laid down in a 'CAO', a collective labour agreement, as is the case for most other employees; performance-related pay for executives must be abolished; in each firm the works' council, an officially recognised body in the Netherlands on which sit representatives of management and workers, should be given the right to vote on the highest salaries; favourable tax rules for foreign executives must be subject to limits; and salaries above the level paid to the Prime Minister – thought to be around €160,000 per annum – would no longer be tax-deductible. These proposals were rejected by the government and its supporters in Parliament.

You are here