While debate continues to rage in the UK about bonuses, and bank bosses defend their payouts, their counterparts in Spain are taking a rather more pragmatic and popular approach Rodrigo Rato's position as a former boss of the International Monetary Fund and now one of Spain's senior bankers would normally put him among Europe's highest-paid financiers. But then his bank took money from the taxpayer so Rato has agreed to have his executive chairman's salary at the Bankia group slashed by three-quarters. His €2.34m (£1.95m) package will be cut to €600,000. The cut has been ordered by the new conservative People's party government of Mariano Rajoy, which is clamping down on pay to bankers who have had to seek help from the state. "Naturally, I will obey," said Rato, who heads Spain's third-biggest lender. Bankia's number two, Francisco Verdú, will also see his salary reduced to €600,000 from €2.2m. Non-executive directors will be limited to €100,000. "Bankia and all of us who work in it will, of course, comply with any government decision," said Rato, who is also a former PP finance minister. Where the Spanish government has nationalised or part-nationalised a bank – as happened with Britain's Lloyds TSB or the Royal Bank of Scotland – the salary cuts are even greater. The upper limit for these banks is €300,000, with non-executive directors capped at €50,000. That will be a blow to Adolf Todó, head of the CatalunyaCaixa savings bank, and Jordi Mestre of Unnim. Their wages are €1.55m and €960,000 respectively. The measures announced by the finance minister, Luis de Guindos, will hurt a handful of senior bankers, but have been widely approved of by Spaniards. "We are asking society as a whole for sacrifices and those of us who have most should set an example," De Guindos, former banker who once worked for Rato, told El País newspaper. Bankia received a €4.5bn loan from the Spanish government's FROB bank restructuring fund, which has been used to support consolidation and part-nationalisation of banks. CatalunyaCaixa and Unnim were both nationalised as they sank under the weight of toxic property loans. The salary measure was part of a fresh round of banking reform earlier this month when De Guindos ordered Spanish banks to put aside some €50bn for bad loans and write-downs on toxic real estate. This will bring further consolidation and more use of FROB money. The fact that the measure was passed by De Guindos rather than his socialist predecessor, Elena Salgado, has raised eyebrows. Spain's leading political blogger, Ignacio Escolar, said: "She made a feint at capping these salaries but her plans never came to fruition." He noted that the head of a bank rescued by taxpayers would still earn 10 times the average wage. "In one year they will earn as much as someone on the minimum wage will get in their life, if they work for 33 years." Rajoy has also raised income tax, especially for higher earners, and come out in support of the financial transactions tax introduced by the French president, Nicolas Sarkozy. He took over the reins of government in December from José Luis Rodríguez Zapatero's socialists.
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