Brussels, 09/02/2001 (Agence Europe) - The problem of pensions is no less than a timebomb threatening the European economy. Without reforms, public deficits risk worsening and will prevent countries from continuing to meet the criteria for belonging to the euro. This, in substance, is the warning that Frtis Bolkestein, Commissioner responsible for the internal market, sent out at a seminar on the future of pensions organised by the Friends of Europe in Brussels on 6 February, and in which participated, other than businessmen like Carlo De Benedetti, Vice-Chairman of the European Round Table of Industrialists, Frank Vandenbroucke, Belgian Minister for Social Affairs and Pensions, Michel Rocard, Chairman of the European Parliament's Committee on Employment and Social Affairs, Wilfried Kuckelkorn MEP (rapporteur on the Green Paper "A single market for supplementary pensions") and Kees Van Rees, Chairman of the European Federation for Retirement Provision.
For Frits Bolkestein, there are at least three reasons that warrant pessimism: the ratio of workers in relation to pensioners, currently 4 to 1, will decline to less that 2 to 1 by 2040; if unfunded pension liabilities were "budgetised", in some Member States this would represent a debt of over 200% of GDP; even with the current reform in place for public pension schemes, spending will increase by between 3% and 5% of GDP in most countries. These figures are more than explicit, and could become even worse if, for example, there were a significant increase in life expectancy. Recalling that the primary responsibility for meeting this pensions challenge lies with Member States, the Commissioner stresses that "Community action can help underpin the reforms that Member states are now making to defuse this "timebomb". The ability to pay pensions depends on the health of public finances, which in turn depends on the success of economic and monetary union, which itself is dependent on a sound economic environment regarding investment, growth and employment, an environment that in its turn creates the capacity to pay pensioners, Bolkestein pointed out. To emerge from this vicious circle, the Commission encourages Member States to accelerate the speed of paying back the public debt, to increase the rate of employment to reduce the number of unemployed, and to reform public retirement systems, he recalled, noting that the Commission and Council would be drawing up a joint report for the Stockholm Summit on these issues. Noting that fewer that 25% of people aged between 60 and 64 were in employment, Bolkestein considered that people in that age group needed to be economically active and that policies had, therefore, to be found to reverse that trend: the Commission shall be reporting again on this topic to the Gothenburg Summit next June, he announced.
As for the draft directive on the supervision of pension funds presented last October, the Commissioner considered that, by enabling the organisations concerned to draw full advantage of the euro and the single market and workers to sign up to a fund established outside the borders of the State in which they live, that text would enable these funds operate more efficiently.
Finally, turning to the issue of tax obstacles that may prevent migrant workers from retaining their pension schemes in their country of origin or a worker from signing up to a scheme in another Member State, Mr. Bolkestein announced that the Commission was preparing a communication on the subject. Other than guidelines for removing the tax obstacles, this initiative, expected in the coming months, will also comprise proposals for improving the exchange of information on cross-border pensions and explore ways of dealing with the existing diversity of Member States' pension taxation systems.