Spain takes up the reins
It’s easier to sparkle in a new role if a predecessor is seen to have failed dismally, and this is the case with Spain taking over the presidency from the much-maligned Belgians. In the few months prior to the handover at the beginning of the year, the prevailing opinion in Brussels was that Belgium’s tenure will not be remembered for its work on the occupational pensions directive. So, it’s over to the Spaniards to see if they can push it any further.
But, just before the handover, Europe’s pensions policy makers gathered for the sixth international colloquium on complementary social provision in the EU. The chairman conceded that the Belgian presidency had been slated by the press over their handling of the pensions issue but Belgian minister for social affairs Frank Vandenbroucke was given the opportunity to speak.
He said that member states should consider creating what he called a more “social Europe” that considers pensions as a social rather than a financial issue. Vandenbroucke defended the record of the Belgian presidency saying it had taken a thorough and exhaustive approach to the matter. And he said that the social element of pensions – solidarity and the issue of getting an equitable pension – were often overlooked in favour of straightforward financial criteria.
But the remaining problems for the Spanish presidency were laid out clearly by other speakers. Jean-Yves Muylle, the Commission’s DG for the internal market, started by saying that the creation of pan-European pension funds is seen as highly important by the council. But, he said, occupational schemes have yet to benefit from the single market though this is not for want of trying.
And here lies the problem according to Muylle since member countries are characterised by such diversity. First is the fundamental differences in approach taken by member states- the balance sheet approach taken by countries like Luxembourg, Germany and Austria; the funded approach in the UK, Netherlands and Ireland; and life assurance schemes common in France and Belgium. In addition to this and another obstacle for progress is the diversity of investment approaches and degrees of prudence.
He cited a recent report by European actuaries that showed a colossal difference in approaches and methods both within the EU and within member countries themselves. Actuarial harmonisation is not the issue here, what the point illustrates is that member states need to understand each other’s methods and approaches to occupational pensions.
So, although the Spanish presidency faces an undeniable formidable task, it appears to have made a good start. There is also a feeling among those involved in setting policy that the next six months cannot be any worse than the previous six. Chris Verhaegen at the EFRP says that the new presidency is drawing up alternative proposals to the Belgians although little is known about them.
A fortnight into the Spanish presidency and its spokeswoman is a little vague on their exact proposals only to say that it is keen to promote the pensions issue. More should be revealed at an informal meeting of European ministers for employment and social policy in the Spanish city of Burgos where social protection and employment are under discussion. At the meeting, which got underway as IPE went to press, the viability of pension systems and full employment were topping the bill. Joining the commission and EU ministers were European-level representatives of the social partners, the European Parliament and the chairmen of the EU employment and social protection committees.
And just prior to gathering the presidency said that it was essential to look at how each member states’ systems are working, to evaluate the progress since Lisbon and to consider proposals for future inclusion given today’s economic climate is so different from the one under which the Lisbon agreements were made.
On the same day, Spanish Prime Minister Jose Maria Anzar gave a speech to the European Parliament in which he announced that meeting deadlines for the financial services action plan was one of the presidency’s priorities. He also said it hopes a new approach based on the Lamfalussy report can be applied as soon as possible.
MEP Piaa Noora Kauppi says this is most encouraging and reiterates the assertion by Rodrigo Rato, Spanish finance minister and ECOFIN member, that occupational pensions directive and financial services action plan are priorities.
That there is the political will is beyond doubt but the Spanish presidency may find its progress blocked by forces beyond its control. Says Kauppi: “the problem is the upcoming elections in both Germany and France. Their timing is very bad time in terms of the pension issue. I’m very pessimistic that anything drastic is going to take place during the Spanish presidency because of the elections. For France this is such a delicate issue that they do not want to move forward before the election because it would require the socialist party to make some decisions. This is probably going to be too difficult an issue for them to do before the elections.”
Given this potential obstacle, what would appear a useful exercise would be to build on surveys sent out to member states by the Belgians. One of its much trumpeted achievements was to distribute this extensive survey in a bid to find out more about the various occupational set ups. Further analysis would develop the kind of understanding highlighted by Muylle and, if nothing else, would at least put to good use information that appears to have been almost completely neglected by the Belgian presidency.
The results are back at the council but what is shocking about the exercise is that the subsequent report produced by the Belgians covered half a side of A4. “It’s only a couple of sentences and it says nothing, it’s a complete non-paper,” says Kauppi. She believes a good starting point for the new presidency would be to carry out a decent analysis and put it to good use.
In the meantime, the progress of the directive is in the hands of the council. Kauppi believes that if the Parliament had a common position from the council then perhaps it could do something by the autumn. As it is, the parliament is powerless without an agreement. The Council working group on pensions is being convened at the beginning of February when a paper will be submitted to the working party.
“We don’t know whether the paper is already ready, whether it has been sent out and what it is containing. But everyone is expecting a certain form of initiative from the presidency because the deadline for the financial services action plan is the middle of 2002,” says Chris Verhaegen. It’s over to Spain.