"Belgium Will Set Out Law On Bankers' Pay By Summer 2013 - PM," published at 1547 GMT, omitted that the measure is only for banks receiving state assistance in the first paragraph. The correct version follows:
By Frances Robinson
BRUSSELS--Belgium will set out new laws effectively ending bonuses for senior bankers at banks which have been bailed out by next summer as part of the lessons learned from the problems at lender Dexia SA (DEXB.BT), Prime Minister Elio di Rupo said Wednesday.
"This law will forbid the distribution of variable payments to executive and non-executive directors and members of the management committee," for banks the government has helped, he said according to the text of a speech given in parliament. "We will also decide, at the same time, on a system of remuneration based on long-term objectives for the financial sector as a whole."
Dexia SA (DEXB.BT) was recapitalized by Belgium and France again earlier this month. Its retail banking unit was nationalized late last year and is now called Belfius. Peer KBC NV (KBC.BT) is in the process of repaying its state aid. Mr. di Rupo reiterated his desire to split up retail and investment banking.
The prime minister was addressing parliament the day after his six-party coalition government announced a budget with savings of 3.44 billion euros ($4.4 billion), and a further EUR300 million for economic relaunch programs.
"The 2013 budget has saved our country from the worst, and will shelter us from the cruel winds of financial speculation," Mr. Di Rupo said.
The government will also cut employers' social security contributions for the first 3 new employees hired by SMEs and scientific researchers, and try to improve competitiveness by bringing wage increases in line with those of neighboring countries. Belgium is one of the few remaining countries to have wage indexation, linking salary increases to inflation.
"The Government will ensure that the index reflect households' actual buying habits better and faster," he said. "All this together ensures that the pay gap between Belgium and its neighboring countries will be reduced by 1.6% in 2013 and 2014 alone."
Write to Frances Robinson at [email protected]