EUROPE – European internal markets commissioner Charlie McCreevy wants the fund industry to be released to help the higher capital funding of pension schemes.

McCreevy - noting that “our pensions crisis will deteriorate further” – called for single market freedoms to be extended to the fund sector.

In an address at Initiative Finanzstandort Deutschland in Frankfurt, he said: “With the European pension timebomb ticking in the background, we need to release the single market freedoms for the fund industry, so it can provide more innovative, better tailored and lower cost products.

“In this way we can smooth the transition to higher capital funding of pension schemes which is a vital necessity for many European countries.”

McCreevy said the Commission plans to publish its assessment of priorities in the area in the second half of 2005. He added: “We can give the asset management industry unique opportunities for growth, for job creation and for increasing their global competitiveness.”

Earlier McCreevy had called the current single market framework for investment funds an “old banger”.

He also said that action is required in the clearing and settlement area.

“It is widely accepted that cross-border clearing and settlement arrangements in the EU are complex and fragmented, resulting in much higher costs, risks and inefficiencies,” he stated.

“Action is therefore required, both by private and public sector bodies, in order to achieve the efficient, integrated and safe securities clearing and settlement market that the EU needs.”

Next year the Commission will consult with market participants and “draw up a detailed economic impact assessment in order to be able to take an informed decision”.