EUROPE - Guy Verhofstadt, former Belgian prime minister and now deputy chairman of the APG Groep Supervisory Board, has argued the European Commission is likely to increase its focus on the lack of pension reserves held.

Speaking at a seminar organised by APG in The Hague last week, Verhofstadt argued European institutions - namely the EC, the European Central Bank (ECB) and Eurostat - will increasingly focus on pension reserves, public debt, and work force activity when producing future evaluations of a country's financial and budgetary situation.

Verhofstadt, who has been named as a contender for the potential position of EU president,  predicts such a new focus as one of three major forces which will play an important role on the European market.

Other forces are the pressure from ageing populations who bcan only draw a pension from the first pillar, since they will see its pension income decline.

"Within the older population, there will increasingly be complaint about the decline of the pension's purchasing power," he added.

According to the former prime minister, European institutions need to be forced via a more convergent political system to look whether the costs of an ageing population are covered by the various EU member states.

The "defensive approach" in EC reports on capitalised pension systems should also change, he suggested.

Lastly, Verhofstadt named the international accounting standards, currently under review, as a negative factor on the European pensions agenda.

He predicts proposed reforms as they stand will affect the way pensions are produced and financed, since the new standards might increase costs for the second pillar and promote a more reserved investment strategy.

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