BRUSSELS- European finance ministers will be presented with a compromise proposal for the occupational pensions directive when they convene next Tuesday at the ECOFIN meeting.
If the directive is passed by the Council, it will end months of drawn out negotiations. It would also be a triumph for the Spanish presidency, which has trumpeted pensions as a top priority since it took over from the Belgians in January.
Yesterday Coreper, the group of member states’ permanent representatives, met to review the legislation before passing it to the Council of ministers.
Prior to the meeting, four countries- France, Belgium, Portugal and Spain- were not completely satisfied with the directive although specific details of their grievances were unknown.
Last year the European parliament agreed the directive should espouse the so-called prudent man rule whereby funds are given a free rein in what they choose to invest in.
But a spat emerged earlier this year between countries such as Italy, Spain and France, who were keen to introduce some investment restrictions, and another camp- the UK, Netherlands and Ireland, that were pushing for a more liberal approach.
According to one delegate, most of the problems at yesterday’s meeting were minor and resolved although the French were left holding out for more compromises.
It is believed the French government is reluctant to add its name to the Spanish compromise before next month’s parliamentary elections.
But the delegate added that, even if the French do not come around before next Tuesday, the council can still pass the legislation without their approval.
Spain’s compromise treats domestic and cross border pensions very differently. Pan-European funds will be subject to a few investment restrictions which, as they stand, prevent funds investing no more than 5% in a single stock, nor more than 10% in stock issued by a single group.
Local pensions funds are subject to subsidiarity and are to run according to the country’s legislation.