Financieele Dagblad: ING bonus scandal escalates

A parliamentary majority wants a 100 % retroactive tax stretching back to 2008 on bonuses paid out by banks receiving state aid, writes the Financieele Dagblad on Wednesday.

On Tuesday opposition parties PvdA, SP and GroenLinks decided to support a motion by the cabinet’s alliance partner PVV.
The amount of money involved could run into billions. Insurance bank ING has said it has paid out bonuses to an amount of € 1.8 bn since 2008. Aegon, ASR and SNS Reaal are not mentioning any amount at all and declined to comment. ABN Amro is not volunteering any information on bonuses either but said it thinks ‘this is an important matter which should be looked into carefully by all parties concerned.’
The motion comes in the wake of much political and public upheaval which resulted in disgusted clients taking their business elsewhere and ING boss Jan Hommen renouncing his 2010 bonus. Hommen and rest of the bank’s upper echelon did so voluntarily but, sources say, not until some pressure had been exercised by fellow bankers who fear new and stringent laws will curb bonuses and not only for those banks which received state aid.
New legislation is indeed on the horizon. Finance minister Jan Kees de Jager said as much on Sunday. This would put an end to bonuses for directors at banks receiving state aid and at such times as they should turn again to the state for extra buffer capital or guarantees.
The minority cabinet now has to decide whether to comply with the motion initiated by its silent partner, or ignore it. In an earlier debate, De Jager spoke out against a motion because it would cause unproductive legal wranglings, an argument which banking organisation NVB echoed yesterday: ‘We regret that, against good political practice, a motion has been approved which cannot be executed and which will create false expectations.’
Fiscal law specialists doubt whether the PVV motion will lead to a retroactive taxation. ‘I would be very surprised if the cabinet would agree to that’, says Deloitte fiscal law specialist Peter Kavelaar.
The opposition parties also realise that retroactive taxation is probably not on the cards. But they are happy to see bonuses subject to legislation. Even PVV mp and fiscal specialist Roland van Vliet, who initiated the motion, is prepared for a bumpy landing. If all fails he proposes to tackle the banks at the corporate tax end instead. ‘The ball is in the cabinet’s court’, he said.
On Tuesday the PVV decided to choose a separate strategy and not support the opposition’s wish to go ahead with new legislation immediately. The parties were left with no other option but to support the PVV. That way the possibility of legislation wouldn’t disappear altogether.
Buffer capital
During the credit crisis in 2008 the state put € 20 bn worth of buffer capital at the banks’ disposal, plus a € 200 bn guarantee. ABN Amro was nationalised and the state took over the major part of ING’s American subprime mortgages.
This is an unofficial translation

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