Othmar Karas, European Parliament rapporteur for the occupational pensions directive, says he is to invite European Commissioner Frits Bolkestein to address Parliament over delays in the presentation of proposals for a directive on taxation and to explain suggestions that the Commission will now seek to dilute the initiative by issuing a communication in place of a directive.

“Many people are disappointed about the way things are being handled in the Commission, especially the “back and forth” on the nature of the text and the constant postponing of the presentation date.
“ I have therefore initiated a question to the Commission, which is being supported by both the Socialist Group and the EPP-ED urging Mr Bolkestein to explain to Parliament the reasons for this approach and what his intentions are now in order to eliminate the remaining obstacles to cross-border membership,” says Karas.

However, the Austrian MEP believes that Bolkestein’s endeavours will surpass any past efforts to resolve the taxation impasse:
“ Having been informed from the Commissioner’s cabinet on some aspects of the forthcoming initiative, I must admit that it could appear to be more effective than 10 year of fruitless negotiations in the Council, as has been the case on other tax issues.”

And he explains Bolkestein’s focus on European law as a possible breakthrough on taxation: “Based on the observation that some obstacles to an internal market on pensions are due to a different treatment of national and non-national products and/or contributions, we are confronted with a clear case of discrimination between European citizens, which is banned by the treaty since 1957. The Commission therefore strongly aims at pointing out the obligations falling upon member States and urges them to remove these discriminations.
“ This is a good approach, which could allow reaching part of our goal in the tax area without the need for a new legislative text.”

However, he concedes that the remaining tax aspect; the move to an EET (exempt, exempt, taxed) system in all member States will not be dealt with by means of a European text.
“ It is a pure matter of sovereignty. This will need a lot of convincing rather than pressure, as well as a deal assuring the countries concerned that they will in the end not lose their due tax income.”