EUROPE - The EU Commission attacked member states yesterday for jeopardising prospects for pan-European pensions by not looking beyond their own borders - stressing that the matter was now urgent.
Speaking at the EFRP/NAPF International Conference in Brussels, Commission official Jean-Claude Thebault said that there was a lack of determination within some countries which felt that the EU’s proposed directive for European Pensions would impinge on existing second pillar arrangements. And he added that those countries with less developed occupational schemes looked to the existing Life Assurance Directive to guard their interests.
Thebault added that the present situation reminded him of the creation of the European market when short-term commitments were prevailing.
It is urgent that all members stop looking at their own personal interests,” he added.
According to Thebault, who is currently Directorate General Markt and Director of the C Direction Financial Institutions, the proposal is central to financial integration, adding that it provided a test case for any continued progress.
He also pointed to several misunderstandings around the directive - particularly concerning the flexibility around pensions - adding that industry talk about a higher degree of harmonious rules on [cross-border] investments was a bit naive. When pushed on whether the issue of cross-border tax would delay the creation of a single occupational pensions market, he said that the Commission may have some problems with the European parliament programme but did not believe that this would pose any real difficulty.
There were earlier calls from Austrian MEP Othmar Karas that the directive “will have to be supplemented by a high degree of coordination in tax.
The taxation issue will have to be addressed if cross-border pensions are to become a reality. If the [European] Council doesn't agree on taxes, then they will not have any legislation,” he added.
Karas also proposed a pan-European pensions forum to ensure an unproblematic functioning or direction of cross-border activities.
The deadline for the EU proposals is 2005. European officials seemed to agree that a decision on tax must be reached by next year, or May 2003 at the latest.
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