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The French Exception: Sarkozy's Bonus Battle

For this week's Global Pulse episode, Bonus Battle, host Erin Coker asks whether France's new bonus restrictions are workable. Share your thoughts and watch this episode below!

A leader whose extravagant lifestyle once earned him the moniker "President Bling-Bling," Nicolas Sarkozy has adopted a tough stance against financial excess in recent weeks. Following national furor over banking giant BNP Paribas' partial use of government bailout funds to finance a one billion euro bonus payout, new rules require French banks to spread bonus payments over three years, with one-third of bonuses to be paid in stocks. If a trader's investments lose money, the trader also loses the bonus.

The French president has since taken his bonus battle to the international stage, calling for broad global measures to curb traders' compensation, including a fixed international limit on bonuses. Sarkozy even threatened to walk out of the G-20 summit if leaders fail to reach an agreement on bonuses.

European Commission President José Barroso told Bloomberg television that citizens "are horrified" by banks' use of government funds to pay bonuses, and that international bonus restrictions could "restore credibility to the financial system."

Although American and British leaders agree on the need for financial regulation, they have balked at the idea of bonus caps. President Obama is "reluctant to set individual compensation levels." It is looking like Sarkozy may compromise on the caps, as long as the larger package is put in place.

Debates over bank bonuses are also raging outside of the political sphere. Earlier this year, American and British outrage over executive bonuses spurred demonstrations from Wall Street to London. However, as the global economy shows signs of recovery, some experts have questioned the need to quell bonuses.

"I don't think, ultimately, people really care that much about banker bonuses," writes Daniel Indiviglio in a recent Atlantic Monthly article. "The only reason they do now is because there was a financial crisis. Once things get better, most of that anger dissipates." He adds: "The bonus culture isn’t what caused the financial crisis, it was a culmination of factors."

The Washington DC-based Institute for Policy Studies hailed the Sarkozy decision, arguing that European government action "will open up opportunities in Washington for real change to an executive compensation system that now threatens our economy and our democracy."

But even some French supporters are doubtful that the global financial world will embrace the measures. "Sarkozy's idea is a good one," Nicolas Bouchard, a 32-year-old Paris-based corporate attorney told Global Pulse in an email. "But it is a difficult one to carry out in a global system.  Paris is a small financial center in comparison with Wall Street or London."

One self-described French "utopist" offered another way that Sarkozy could display support for the end of economic excess. In an email to Global Pulse, Alexandre Carpentier, 28, challenged summit attendees to forgo luxury hotels in favor of more modest accommodations.

"It would help the local economy, there would be less rioting and people would be proud of their leaders," the Paris-based competition lawyer explained.

A bit of a stretch? Probably. But a reminder that in a world recovering from financial fallout, public scrutiny is on political leaders as much as it is on banks -- particularly a president trying to distance himself from a "bling-bling" image.

 

 
 

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Swine Flu Diary

For this week's Global Pulse episode, Swine Flu: The Vaccination, host Erin Coker asks, Will you get vaccinated? Share your thoughts and watch this episode below!

When I first learned of swine flu, I dismissed the general reaction as unnecessary panic over something no more threatening than – well, catching the flu. Inconvenient and uncomfortable, but hardly the second coming of the 1918 influenza pandemic.

Then I caught the H1N1 virus myself. After being diagnosed, I took comfort in the fact that, according to the Centers for Disease Control and Prevention, of the estimated 1 million Americans believed to have been infected with the virus between April and June, only about 593 have died. To provide a bit of perspective, seasonal flu can result in up to 500,000 deaths worldwide each year. So if you do get swine flu, chances are it will not kill you, or even result in serious symptoms. I am living proof, although there were times over the last week when I wasn’t so sure.

"Uncomfortable and inconvenient" is an understatement. I am a generally healthy young person, but I was immobilized by a high fever, chills, severe muscle pain and fatigue. I would be dishonest if I said that there weren't a few scary moments when I felt compelled to inhale deeply to make certain my lungs were still working. The normally benign shadows on my ceiling took on a menacing hallucinatory quality. Would ever feel like myself again?

Six days of bed rest, fluids and the antiviral Tamiflu later, I am starting to feel better. So, have my feelings about swine flu changed? Yes and no.

As ABC News reported earlier this week, thousands of people have contracted swine flu in recent months and have made a full recovery. Global mortality rates to date are lower than those associated with seasonal flu -- the World Health Organization (WHO) reports 2,837 H1N1 deaths worldwide -- but health experts have noted that H1N1 may cause more severe illness and death in younger adults and children than does the seasonal flu. Reuters reported that the WHO has also warned of a severe strain of swine flu that can cause acute respiratory illness in otherwise healthy young people.

More disturbing is the potential threat to developing countries, which often lack the resources to produce vaccines. A recent report released by a UK-based global risks intelligence firm (PDF) notes that while Western nations may be at the greatest risk of spreading H1N1, they also have significant resources to contain the proliferation of the virus. In contrast, Sub-Saharan Africa stands out as the area least able to contain an influenza pandemic. Underdeveloped health facilities and the difficulty of accessing doctors in rural areas could pose further risks to vulnerable populations.

Nonetheless, as I read recent reports warning of a more aggressive second wave of H1N1, or speculations of a deadly mutated super virus, I recall what Indian blogger Hariharan Krishnamurthy wrote in mid-August after a swine flu outbreak killed 20 people in Mumbai and in the western city of Pune: "There is a mass hysteria about the swine flu... The news channels are adding fuel to the fire... and newspapers showing only the negativity... I am not trying to undermine the seriousness of the issue but also so much panic is also not at all required."

A good reminder that prudence and preventative measures are best combined with a healthy dose of perspective.  Take it from one of the latest statistics.

 

 
 

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Opposition Detainee Abuse and Iran's Power Struggle

For this week's Global Pulse episode, Iran’s Power Players, host Erin Coker asks the question: Are Khamenei and Ahmadinejad playing "good cop, bad cop"? Share your thoughts below!

In the nearly three months since Iran's disputed election and the massive street protests that followed, global media have turned their attention to the internal factional bickering within Iran's ruling party. Allegations of detainee abuse have created further fissures within Mahmoud Ahmadinejad's conservative government, with the country's leadership offering conflicting responses to the allegations.

Reacting to claims made by opposition candidate Mehdi Karroubi of detainee torture and sexual abuse, Iran's parliament speaker Ali Larijani vehemently dismissed the allegations as "sheer lies," according to a CNN report. Larijani's remarks contradicted police and judiciary officials who acknowledged detainee abuse at the now-shuttered Kahrizak prison and promised to investigate the claims. According to The Guardian, an unnamed Iranian MP said he had proof of the abuse, further contradicting Larijani.

As this week's episode points out, Ahmadinejad and the country's supreme leader, Ayatollah Ali Khamenei, have also appeared at odds over abuse allegations. According to a report that ran on the state-controlled Press TV website on August 28th, Ahmadinejad blamed the abuse on an enemy plot, saying that he had evidence which "exonerated revolutionary, military, security and intelligence forces." But three days later, following a report that the detained son of a conservative political advisor had died as a result of abuse, the BBC reported that Ayatollah Khamenei promised the young man's father that those responsible would be brought to justice.

The confusing signals reflect factional struggles at the highest levels of government, which can only be aggravated by the Iranian blogosphere's relentless pursuit of allegations of torture, sexual abuse and killings of detained protesters, often through chilling personal accounts. On September 2, the independent Radio Zamanah’s website reported that a rape victim and key witness in the case had disappeared. Mentions of the story surfaced several times throughout the day on the microblogging site Twitter, alongside posts like "Regime, No matter how many you execute, torture, or rape. We will never stop. We will never give up on our right to freedom," and, "Saeedeh's body was burned & almost unrecognizable (note that she was arrested from her house, so burning was deliberate)."

Even after the dust has settled on the present internal political struggle, it may take more than damage control to bridge the divisions between the Iranian government and its people.

 

 
 

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