Catherine Stihler, Scottish Labour MEP

The financial crisis has claimed its first government. The fall of the Icelandic Government signals another chapter in this global man-made disaster. Yet those who created this catastrophe have yet to feel the real pain of the decisions which they made. Whilst people are being laid off across the EU in their tens of thousands as a result of the credit crunch, it is astounding to learn of the scale of remuneration for senior bankers. The Guardian recently revealed that:

"A dozen senior bankers whose influence has shaped the financial world gave themselves pay awards valued at more than one billion pounds before the credit crunch spectacularly exposed the fragility of the profits they appeared to have secured for shareholders. Although seemingly profitable during the boom, these same banks have since revealed losses, write-downs and emergency capital injections totalling more than 300 billion pounds."

Does anyone who created this scale of calamity really merit those kinds of sums? The former head of Merrill Lynch saw through a .2million office refurbishment at a time of mass staff lay-offs. How could the bonus-driven culture of the banks prevent people seeing the folly of their actions?  

Reform of our financial system is necessary. The greed culture which has been the driving force of the sector must change.  The Czech Presidency of the European Union has committed itself to action in three major areas linked to the credit crunch: the recovery of financial markets and discussions on better regulation; coping with the decline in economic growth; and the preparation of the EU for international debates on the global financial architecture.

However, what does this mean in practice? The European Economic Recovery Plan, agreed by the European Council in December 2008, is a joint framework for the coordinated effort of the European Union and its Member States.

The European Union will also play a significant role in international negotiations about a financial system reform that would prevent the recent crisis from recurring in the future. The April G-20 Summit in London gives the opportunity to ensure that the EU makes a coordinated contribution in the search for solutions at a European and a global level. We must seize the moment to push for change and to reform financial institutions.