Jan. 21 (Bloomberg) -- French President Nicolas Sarkozy agreed to provide a further 10.5 billion euros ($13.6 billion) in aid to the country’s biggest lenders in exchange for their top executives giving up bonuses.

The agreement late yesterday to channel the extra capital came a day after British Prime Minister Gordon Brown announced his second rescue plan in three months, underscoring how an initial round of bailouts failed to restore credit. President Barack Obama is also considering new measures to fix the U.S. banking system as a global economic slump deepens.

Sarkozy has been pressuring banks in recent days, saying repeatedly that they shouldn’t pay bonuses to management or dividends to shareholders. Credit Agricole SA and smaller rival Societe Generale SA said yesterday they wouldn’t pay bonuses to their chairmen and chief executives. BNP Paribas SA, France’s biggest bank, made a similar announcement last week.

“We ask banks that make a profit to finance the economy” and not reward shareholders, Finance Minister Christine Lagarde told reporters after the bankers met Sarkozy and top officials in Paris. The state wants banks to use the extra funds to boost shareholder equity, she said. The more profitable banks may still pay a dividend, she said.

The new funds will be made available “shortly,” a statement said.

France has earmarked 360 billion euros for its banks, most in the form of guarantees. In exchange, it has prodded them to increase lending, appointing an ombudsman to ensure they are. Last month, the government pumped 10.5 billion euros into the country’s six largest financial institutions, including BNP and Societe Generale.

Financing ‘Improved’

“The financing of banks has improved since the extreme difficulties that characterized the September-October period,” Sarkozy’s office said. “To accompany them, the state will shortly put at the banks’ disposal a new pool of shareholders’ equity to draw upon, depending on their requests.”

The other banks attending yesterday’s meeting were Credit Mutuel, Caisse d’Epargne, Banque Populaire and La Banque Postale, a unit of the state-owned mail service.

Separately, the French banking federation said that the banks “are playing the game” and maintain their goal of increased lending even as the economy deteriorates.

The European Union yesterday projected that the French economy will contract 1.8 percent this year, cutting its earlier forecast for no growth, a forecast Lagarde called “painful.” Officially, she still projects the economy will expand next year, although she said today she’s preparing new estimates.

In an interview on RTL radio, Lagarde said the European Commission will today start reviewing the new aid plan. The decision should be quick, she said, because the Italian government has already used preferential shares to channel funds.

To contact the reporters on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net; Sandrine Rastello in Paris at srastello@bloomberg.net

Last Updated: January 21, 2009 02:17 EST