EUROPE – The European Union’s commissioner for internal markets says that a forthcoming agreement on the EU pensions directive is part of a package of measures that will lead to “real benefits” such as competitiveness and sustainable employment.

Frits Bolkestein notes that several aspects of the so-called Financial Services Action Plan are already in place: unit trust legislation, international accounting standards and market abuses and so on. “Further agreements are near on pension funds and prospectuses,” Bolkestein writes in a letter to the Financial Times.

The EU directive on pension reform is currently making its way through the European Parliament. It is expected to be ratified by the parliament in the spring of 2003.

The measures “will lead to real benefits” such as greater competitiveness, more sustainable jobs and economic improvement, he adds.

“The EU needs a single financial market if it is to become more competitive and create more sustainable jobs,” he writes.

Bolkestein estimates that gross domestic product in the EU will be boosted by 1.1%, the cost of equity capital fall by 0.5% and the cost of corporate bond financing will fall by 0.4% with the creation of a single financial market. The EU pensions directive is part of that vision.

“For every day that goes by without the single financial market, our companies and investors are denied these real benefits,” he says.