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IPE special report May 2018

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Karas takes over the baton

Othmar Karas may be a name few in the European pensions domain recognise.
Over the coming months, though, the name of the Austrian member of the European parliament and rapporteur for the parliament’s Christian Democratic Party on the long-awaited supplementary pensions directive, will become a whole lot more familiar.
Taking the baton from the European Commission, Karas notes his satisfaction at the progress made so far on the supplementary pensions directive, whilst acknowledging that the hard work is by no means over. “The main point is that everyone is happy that we have a draft directive, but of course there are many problems to discuss.”
The crux of the difficulties ahead, he believes, is that the proposed directive straddles two spheres of interest. “We have the typical insurance companies on one side of the debate and on the other side we have the typical financial services companies – one side is the financial markets and on the other side the social element.”
However, Karas does not believe the different viewpoints are incompatible. “My view is that these are not opposed to each other. We need both groups of companies and political interests in one boat and this boat is then very important for the European internal market but also for the financial markets.”
And he makes clear that some of the diametrically opposed views the directive has thrown up may mean parliament has to take one step back before it can take two forward. “From today’s debates it is clear that we have to decide what we need, what we want, and then discuss issues like biometric risk – but, of course, this is only one part of the debate. In Bolkestein’s proposals we have the issue of biometric risk included.”
Karas’ work now, he notes, will involve the production of a reactive proposal taking into account the suggestions of the Commission. “The main analysis of the proposal of Bolkestein should be finished before the end of the year and then I will enter into discussion with various groups around Europe.”
He then hopes to see the decision on the common view of the parliament taken around Easter and predicts a decision in the plenary by May 2001.
Building on the momentum of the supplementary pensions directive, Karas says he will also be entering into “intensive discussion” with the European Council. “It is good to have this link because we need a result. We have to remember that this is not only a report!”
Karas also believes that the role of parliament in such a high-profile debate can only be good for the institution itself. “The parliament is the first body to look at these proposals and we will also be the precursor for discussion on Commissioner Bolkestein’s forthcoming tax proposals. In this way the parliament can be the co-ordinating power for this issue, which is good because we have a very intensive contact with the people and the different interest groups involved in the process. This is the reason that I will hold hearings with pension funds, insurance companies and regulators of member states in February in the parliament.”
Again he brings up the issue of the two political camps, which will have to be brought together before any real progress is made. “One side is saying they want only a very small influence on pension funding from Brussels, the other that we need common rules and more details in the proposals. Either we can have a small influence from Europe and more rules in the member states, or more rules in Europe and subsidiarity in the member states. Personally, I think Bolkestein’s proposals have both.”
He once again underlines the importance of the underlying issue and his own desire to ensure that conclusions and legislation are indeed brought to bear. “My wish is to have a very wide majority on the report, so it is important to discuss with everyone, and I say again, we need a result.”
In consummate political style, he brushes aside any mention of the criticism that France has borne for what many have perceived as stalling tactics on the pensions issue during its tenure of the European Council of Ministers.
“France has had a lot of work to do in the parliament and they can’t start the discussion on pensions in the council – that is my problem. I have had meetings with representatives from France and they have told me that there is no danger of them blocking any future proposals.”
Looking forward, he believes the Swedish presidency – beginning in the new year – will get the ball rolling. “I hope the Swedish presidency starts looking at this very early so we can discuss it in the parliament and with the presidency, because we will also have the second proposal on taxation.”
He is also optimistic that Bolkestein will make headway: “I have heard that Bolkestein is being very active in making a proposal and I hope he wins. Our task is then to discuss the proposal.”
Karas says he feels little pressure from some of the concerted lobbying of interested parties on the supplementary pensions issue: “Everyone has told me their opinion and I think that is good and important for me.”

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