Tuesday

10th Dec 2019

Commission plans to tap pension funds to kickstart business

  • European pension funds hold €2.5 trillion which should be put to work, says the commission

Tapping pension funds and encouraging online crowd funding are at the heart of plans unveiled by the European Commission to kickstart business investment.

Speaking on Thursday (27 March), financial services commissioner Michel Barnier said the Commission's blueprint on 'long-term financing' published the same day was needed to further encourage alternatives to traditional bank lending which remains stagnant more than five years since the start of the financial crisis.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 30-day free trial.

... or join as a group

"Our financial system must regain and increase its ability to finance the real economy," he said, adding that "we need to diversify financing sources in Europe and improve access to finance for small and medium sized enterprises."

The bloc also needs to kick-start investment in research, new technologies and energy if it is to reach ambitious targets in its Europe 2020 and 2030 climate and energy package. It is also seeking funds worth around €1 trillion for its flag-ship infrastructure project Connecting Europe.

As part of changes to the rules governing work-related pensions, the Commission wants to ease the restrictions on what these funds can invest in. It also wants to reduce the capital requirements for banks and insurance firms looking to invest in asset-backed securities.

Although such securities products triggered the sub-prime debt crisis in the United States which, in turn, was at the heart of the 2008-9 financial crisis, Barnier insisted that easing the rules would not risk a repeat of the crisis.

European pension funds have assets worth more than €2.5 trillion on their books on behalf of over 75 million people. The EU executive believes these could be invested in businesses.

Europe needs alternative sources of investment as its banks continue to recover slowly from the financial crisis in 2008-9, while the countries hit hardest by the eurozone's debt crisis have seen businesses starved of cash.

The EU executive estimates that only one in three Greek and Dutch businesses and one in two Spanish and Italians got the full amount of credit they applied for in 2013.

Lending to small businesses in across the bloc's periphery has fallen by over 50 percent over the past five years, according to research by the Institute of International Finance.

Barroso fights to keep investment pot in EU budget

The European Commision has started banging the drum for a new €50bn pot of money that it says will reinvigorate Europe's economy. But the aid is unlikely to make it through budget negotiations unscathed.

Human rights abusers to face EU blacklists

Human rights abusers worldwide will, in future, face EU asset freezes and travel bans under new-model sanctions agreed by foreign ministers in Brussels.

Zahradil 'conflict of interest' probe may flounder

The European Parliament's internal body, designed to sanction MEPs for conflicts of interests, has failed to deliver any meaningful verdicts. Some are hoping a future proposal for a new independent ethics body will help hold MEPs accountable.

Investigation

Data watchdog raps EU asylum body for snooping

The European Asylum Support Office combed through social media to monitor refugee routes to Europe for three years. The agency sent weekly reports on its findings to member states, the EU Commission and institutions such as UNHCR and Interpol.

Investigation

Pesticide chlorpyrifos banned by EU

EU member states have voted to ban from the market chlorpyrifos, a pesticide which is toxic to the brain in both its forms, and has been the subject of a long-running Le Monde and EUobserver investigation.

News in Brief

  1. Orban wants bill to tighten grip over theatres
  2. Dutch reduce terror threat level for first time since 2013
  3. Russia banned from Olympics over doping scandal
  4. EU agrees future human rights sanctions
  5. Greens demand Zahradil conflict of interest probe
  6. EU commission to 'correct mistake' on enlargement
  7. Luxembourg pushes EU to recognise Palestine
  8. Minister: 'All Brussels kids should be trilingual at 18'

Agenda

UK election plus EU summit in focus This WEEK

EU leaders will try to agree on the 2050 emission-free target - but they will deeply disagree on EU spending over the next seven years. Meanwhile the UK will elect its new political leadership.

Migrants paying to get detained in Libyan centres

A trend has emerged over the past few months where desperate people are paying to get locked up in Libyan detention centres to escape the conflict and with the hope they stand a better chance of getting resettled to Europe.

Stakeholders' Highlights

  1. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  2. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  3. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  4. Nordic Council of MinistersNordic Climate Action Weeks in December
  5. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  6. Nordic Council of MinistersBrussels welcomes Nordic culture

Join EUobserver

Support quality EU news

Join us