Keys for success in influencing Brussels
Legislation passed by the EU is not the end-result of decisions taken behind closed doors by Eurocrats or Euro-parliamentarians. The adoption process is to some extent open to the input of market players. The variety and number of interests represented on the different pieces of legislation, however, require interested stakeholders to define carefully a coherent and long-term strategy, to optimise the chances of successful lobbying.
Experience shows that positive outcomes result from a combination of factors, including political aspects, which are the most difficult to master. EFRP experience with the directive on the activities and supervision of institutions for occupational retirement provision (IORP) illustrate guidelines for success in this complex process.
The global context of the IORP discussion had a particular impact on the EU legislative procedure and on the lobbying process.
As at national level, a particular piece of draft EU legislation needs to be regarded in its broader economic, political and social context. This was particularly so for the IORP directive, as all member states face similar pension time bombs.
The reforms of national pension systems are priority issues for member states – arbitrages need to be made between pay-as-you-go and funded schemes, incentives have to be set up to encourage citizens to save for their old age. These are highly sensitive issues at a national level. The EU’s role is to support these reform efforts, coordinate national policies and encourage convergence of national plans.
However, some stakeholders were tempted to introduce more controversial elements in the EU debate and use the IORP to show that Brussels intended to interfere in national debates. Basic but essential clarifications consequently had to be made continuously, especially by EFRP, on the exact scope, the final objectives and the impact of the IORP directive:
q the directive does not intend to define pension products. Member states remain responsible for establishing their own criteria;
q the directive seeks to regulate IORPs where they exist. It does not require member states to set up such schemes, in particular to replace pay-as-you-go state schemes;
q the directive exclusively deals with prudential and supervisory activities of pension institutions. Social and fiscal aspects remain outside the scope of the IORP directive and will require separate initiatives.
Members of the European Parliament (MEPs), and to a lesser extent some member states, needed to be assured that there was no hidden Brussels agenda behind the IORP proposal. EFRP had to include some background elements in most , if not all, briefings, exchanges of viewsand bilateral contacts in order to refocus the discussion and avoid major misunderstandings, as well as biased and irrelevant debates.
One of the main assets for a successful EU advocacy project is to make contact as early as possible with key stakeholders in the different institutions. The first is the European Commission (EC), which initiates EU legislation. “Early” in that context means as upstream as possible, before the EC officially presents a legislative proposal.
Regulatory measures at EU level are usually preceded by protracted consultation undertaken by the EC with national experts, business representatives, academics and others. This is when key ideas should be initially presented to the EC services, so contacts must therefore be established with key desk officers. These preliminary dialogues can be reflected in formal consultation procedures (through green papers or white papers), when interested parties at large are invited to comment on the EC’s initial thoughts.
For occupational pensions, a green paper was produced in 1997. The 1996 research study commissioned by EFRP entitled European Pension Funds – Their Impact for European Capital Markets and Competitiveness largely contributed to the EC position. It also shed further light on the need to liberalise investment rules and to introduce the European passport for pension funds as key parts of the debate. This also enabled EFRP to broaden and consolidate relations with EU officials, to generate a two-way stream of information and confidence, and to influence the longer-term EU agenda on supplementary pensions.
In the course of the legislative process, further interventions directed at EU decision-makers need to be undertaken, to provide technical or political input, to support the direction and principles outlined, or most often to suggest changes and/or clarifications. MEPs and members of the Council working groups, who work in parallel in the “co-decision” process, then become the main targets. There, it is paramount for stakeholders to anticipate, to be able to present and argue a position, in advance of a key meeting or a vote. EFRP established close working relationships with key MEPs active on the issue at committee level within the Parliament and also with the EU financial attachés representing member states in Brussels. This enabled EFRP to be informed of the progress of the file and to gather intelligence on developments. It could also rely on the active role of its national member organisations to multiply its efforts and voice its concerns at local level in a convergent manner.
In preparation for key legislative steps, stakeholders should identify, or set up, specific lobbying opportunities such as roundtables, workshops and conferences where their priority issues or related ones can be discussed with influential policy-makers. EFRP organised and took part in several ad hoc seminars and panel discussions, where it was able to promote its views and be identified by all stakeholders as a central expert party in the debate.
Stakeholders should define in detail their ideal outcome and have a clear idea, possibly in a written form, of the framework they aspire to. This could serve as a useful reference to provide technical expertise and concrete input to EU institutions, especially when the EC is about to start writing a proposal.
EFRP proved very active and successful in this regard with the report A European Institution for Occupational Retirement Provision (EIORP) published in July 2000. This not only outlined why Europe needed a single licence for institutions for occupational retirement provisions but also presented practical conditions for the EC to take the proposed approach forward. It was a comprehensive set of proposals that examined the prudential, social and taxation aspects of occupational pensions. It was released a few months before the EC’s proposal for a prudential directive was adopted (October 2000), and was explicitly referred to by the EC in its communication The elimination of tax obstacles in the provision of cross-border occupational pensions (April 2001). The EC formally brought the EFRP model to the attention of the Council, the European Parliament and the Economic and Social Committee, and invited member states to explore with it how the proposal for pan-European pension institutions could be made operational.
At later stages in the regulatory process, concrete and factual positions, clearly showing why a provision of the envisaged framework creates problems, should be presented. This should be illustrated by facts and figures, possibly on a pan-European basis, which will add weight to the arguments and bring them closer, in particular for complex technical issues, to the real world. In the context of the single market for occupational pensions, arguments such as support for the mobility of workers, the reduction of costs for multinational companies, the level-playing field between all pension providers, the wider choice of pension products offered to employers, etc, resonated positively with MEPs, keen to link the EU issues to the needs and concerns of their constituents.
Criticisms alone are not productive; constructive proposals and alternative solutions must also be submitted. This is particularly so with some MEPs, who appreciate being provided with ready-to-table proposals for amendments. EFRP worked closely with MEPs to bring improvements to the text, for example on the anchoring of the “home state control” principle in the directive. EFRP also developed the “prudent person” concept, which all Council representatives then agreed to maintain as one of the basic principles for the final directive. A willingness to compromise was also required, as many of the directive’s core issues were the subject of fierce discussions, which threatened basic principles of the whole framework. One example was the issue of biometric risks in the definition of benefits.
Joint statements and positions, backed by common lobbying activities, especially when they are built on a cross-sectoral or cross-market basis, are likely to be examined with great care by policymakers and wield significant amount of influence.
Before the EC launched the IORP proposal, talks between EFRP and European insurers Comité Européen des Assurances (CEA), encouraged by the EC, had already been initiated. The final goal was to bring to the EC a joint proposal for European prudential rules for occupational pensions.
EFRP and CEA managed to come together at the second reading stage of the proposal and combined their efforts in lobbying the EU institutions in order to reinforce the strength of their common interests at stake in the proposal. This sent a strong signal, especially to the European Parliament, and proved successful to secure key elements of the final framework.
Anne-Françoise Lefèvre is principal consultant and Diane Iannucci is director at Weber Shandwick Adamson Brussels