If there is such a thing as a European pensions ‘time bomb’, then Frits Bolkestein, member of the European Commission responsible for Internal Market, Taxation and Customs Union, is one of the individuals most likely to help defuse it. This year’s IPE Award for Outstanding Industry Contribution goes not just for Bolkestein’s stellar work on the pan-European Pensions Directive in 2003, but for his continued bold support of sustainable pension reform in Europe.
Bolkestein has brought his considerable business and political acumen to bear in the world of European pensions and investments. The commissioner has been at the forefront of implementation of the EU Financial Services Action Plan (FSAP) – a blueprint that will shape EU markets for the future.
Bolkestein has the zeal of a true reformer. “Integrating financial markets and breaking down barriers means new opportunities. It means a single set of rules where once there were 15. It means the chance for financial service providers to expand their markets. The chance for business to raise cheaper finance. For consumers to get better value in home loans and pensions.” The FSAP “is about setting free respectable market operators and reining back the less scrupulous and the incompetent,” he announced at a press conference with Romano Prodi, president of the European Commission, in Brussels in June 2002.
However, for most in the European pensions industry, Bolkestein is synonymous with his work on the pan-European Pensions Directive. That we have a directive at all today, after 10 years of seemingly endless stop-start discussion, is due in no little part to the commissioner’s tenacity.
In 2002, Bolkestein and his team at the European Commission skilfully brought together the Spanish and Danish presidencies that held the EU reins that year and began working closely on the blueprint for the directive – uniting the sometimes polar pensions worlds of northern and southern Europe behind the cause – before eventually procuring agreement with the European Parliament and a surprisingly swift ratification at the EU Council of Ministers.
Such endeavour came about because Bolkestein sees pension provision as one of the biggest challenges facing Europe and one of the key pillars of the FSAP. At the same press conference, he commented: “The directive will reinforce protection for pensioners and ultimately bring them better returns. Provision for old age is vital for all our citizens. It is also one of the most challenging long-term economic issues Europe faces.”
Bolkestein is clear that the primary responsibility for meeting future pensions challenge lies with member states. However, he has constantly sought to offer what he has termed the “value-added” proposition that the EU can bring to member states’ pensions policies and reforms.
The move by the Commission to start formal infringement procedures against an unprecedented number of member states regarding pension tax discrimination left few in doubt as to how serious Bolkestein is in this respect.
The commissioner is a big-picture man, though, regarding pensions and his work has straddled both the economic and the social fronts in trying to find effective solutions for Europe’s future pension problems.
Bolkestein has allied himself with other Commission departments on strategies to raise employment rates – especially of older workers and women, so as to reduce the ratio of dependants to active workers.
Additionally, Bolkestein’s groundwork has prompted member states to examine their public pension systems and look at the need for greater reliance on funded pensions as part of the solution for sustainability – very much a view that the commissioner has espoused on numerous occasions.
The professional and the politician
Married with three children, Frits Bolkestein graduated from Oregon State College, US, in mathematics before adding mathematics, physics, philosophy and Greek to his honours from the Gemeentelijke Universiteit in Amsterdam. He later became a Master at Law at the University of Leiden.
Bolkestein started a successful professional career with the Shell Group and worked for the oil company for 16 years from 1960 – 76, a career span that included posts in East Africa, Honduras, El Salvador, London, Indonesia and Paris. In 1973 he became director of Shell Chimie in Paris, remaining in the post until 1976.
He started his political career in 1978 as a member of parliament for the Dutch VVD.(Liberal) party until 1982. Between 1982 and 1986 he was Dutch minister for foreign trade, before being re-elected as a parliamentarian in 1986. In the same year, Bolkestein became chairman of the Atlantic Commission in the Netherlands. In 1988 he was appointed minister of defence and in was 1990 named as chairman of the VVD Parliamentary Group – a post he occupied until 1998. Between 1996 and 1999 he also held the presidency of the Liberal International group.
The commissioner is chairman of the Amsterdam Bach Soloists. He is also a member of the Royal Institute of International Affairs (London) and the author of books and articles on a wide range of topics.