Luxembourg, 18/10/2001 (Agence Europe) - European Internal Market Commissioner Frits Bolkestein said during the Ecofin Council this week in Luxembourg that he was deeply concerned because the Belgian Council Presidency does not seem to be granting sufficient priority to the proposal of directive on pension funds. Speaking before the press, the Commissioner remarked that this is one of the priorities defined during the Lisbon Summit and that the "European Parliament has already adopted its opinion, but the proposal does not seem to be moving forward in Council". (See EUROPE of 7 July, p.9, for the EP's position).
In November 2000, the Commission had presented this draft directive, the main aim of which is to allow European companies to create transnational pension funds and to compete with American funds, by: 1) harmonising prudential norms applying to such funds; 2) liberalising their management and investment rules; and 3) establishing cooperation between the national supervisory bodies.
During the Ecofin Council, the ministers "noted" a report by the Presidency on the state of progress of work and recalled that the Council had undertaken in May to respect the timetable of the action plan for financial services (Ed.: during the year 2002) and that which appears in the Wisemen's Report" (Lamfalussy Group).
In practice, the Presidency is currently studying the responses from Member States to a 50-point questionnaire on the coordination of monitoring systems, and has still to tackle the key question of prudential rules. The Commission proposed that the funds should be subject to qualitative criteria, with careful and wise management of the investments entrusted to them. While allowing Member States to interpret this rule, it suggested a breakdown of risks between securities (70%) and currency investment (30%). In addition, the States could no longer make it compulsory for the funds to invest in certain categories of securities such as State bonds.
Commissioner Bolkestein seems to have been mainly offended by the cancellation of a technical Council meeting on the matter of supervisory bodies, postponed from early October to 14 November and 13 December. Sweden also expressed disappointment about the lack of progress made in discussions begun under its Presidency.
Furthermore, the Council approved, without discussion, the conclusions on the elimination of tax obstacles to the cross-border payments of occupational pensions. In its communication of 19 April, the Commission proposed a three-point strategy: 1) examination of national rules in order to eliminate discrimination against occupational pension schemes established in other Member States. It did not rule out the possibility of having recourse to the Court of Justice on the basis of non-discrimination rules under the Treaty; 2) a system of information exchange on complementary retirement schemes, in the context of the directive on mutual assistance in the field of direct taxation, and 3) a coordinated approach by Member States to eliminate the risks of double taxation or lack of taxation, due to the large number of different taxation systems which poses a problem for pensioners who settle in one Member State after having worked in another.
In its conclusions, the Council takes on board the Commission's proposal to organise consultation on an information exchange system between Member States, in the context of the directive on direct taxation. It calls on the Commission to present to it the results of its consultation before end 2002. The Council "underlines the need to deal with cases of double taxation and double non-taxation" and invites COREPER to develop, before end 2002, provisions allowing these gaps to be filled. Commissioner Bolkestein pointed out for his part that he has already sent letters to all Member States to gather information on the national systems of taxation on pensioners, in order to assess existing discrimination. "The Commission will decide on further action to be taken on the basis of the answers received", he said, adding that he "prefers to resolve such matters through direct contact with Member States concerned". He said, "dragging the States before the Court of Justice will only be a last resort solution".