EUROPE – The recently nominated European Parliament rapporteur for the taxation element of the European directive on occupational pensions – Dutch MEP Ieke van den Burg (European socialist party) – has told IPE-Newsline that European Commissioner Frits Bolkestein looks set to water down plans for a legally binding directive on taxation in favour of a communication.

However, van den Burg believes that Othmar Karas – parliament rapporteur on the IORP (Institution for Occupational Retirement Provision) framework pensions directive, is still seeking to proceed with a directive incorporating the taxation question – despite previous suggestions by Karas himself that he would not be held back by complex fiscal wrangling.

Van den Burg, a member of the Dutch social democrat party (Partij van de Arbeid) and a substitute member of the European parliament’s Economic and Monetary Affairs Committee (EMAC), says she has yet to see the final proposal from Bolkestein:
“ The last information we had was that we would see something before the end of this month.
“ This is something we are pressing for in the parliament because we also have the other proposal on the IORP from the internal market DG to consider."

She adds:“ What we have clearly stated is that we want the tax proposal linked to that of Mr Karas.
“ The directive gives indications on the financial markets and prudential investment rules, but it also states that trans-border pensions arrangements be made possible and for this the tax element is essential.”
“ I think Mr Karas is also still in favour of linking the tax issue to the directive.
“ That is why we decided to put the plenary vote until May, ” she notes.

Van den Burg explains Bolkestein’s retreat from his original proposal of a directive on taxation:
“ At the end of last year Bolkestein was talking about a directive on taxation for pension funds but now they are talking just about a communication.”
“ The indication is that there has been a discussion in the commission, which is focusing very much on infringement procedures where the commission can only act against member states when they don’t follow European law rulings on cross-border issues.
“ They’ve made it more of an issue for the European Court of Justice.”

She empathises, however, with fellow Dutchman Bolkestein's predicament:
“ Frits Bolkestein is a very experienced politician but taxation is very difficult to talk to member states about.
“ One of the problems is that you need unanimity for this kind of discussion.”

Nevertheless, she believes there is widespread support in the parliament for the combined measure:
“ The pressure is from social partners and the funds themselves and it is very important for labour mobility in the union.
“ I don’t envisage any problems of support in the parliament for this.”