Thursday

23rd Mar 2023

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

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe 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.

Polish abortion rights activist vows to appeal case

Polish abortion rights activists Justyna Wydrzyńska was last week sentenced for giving abortion pills to a 12-week pregnant woman. She will appeal. But with a court stacked by politically-appointed judges, her chances of overturning it are slim.

Polish abortion rights activist vows to appeal case

Polish abortion rights activists Justyna Wydrzyńska was last week sentenced for giving abortion pills to a 12-week pregnant woman. She will appeal. But with a court stacked by politically-appointed judges, her chances of overturning it are slim.

Latest News

  1. Polish abortion rights activist vows to appeal case
  2. How German business interests have shaped EU climate agenda
  3. The EU-Turkey migration deal is dead on arrival at this summit
  4. Sweden worried by EU visa-free deal with Venezuela
  5. Spain denies any responsibility in Melilla migrant deaths
  6. How much can we trust Russian opinion polls on the war?
  7. Banning PFAS 'forever chemicals' may take forever in Brussels
  8. EU Parliament joins court case against Hungary's anti-LGBTI law

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  2. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  3. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  4. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality
  5. Promote UkraineInvitation to the National Demonstration in solidarity with Ukraine on 25.02.2023
  6. Azerbaijan Embassy9th Southern Gas Corridor Advisory Council Ministerial Meeting and 1st Green Energy Advisory Council Ministerial Meeting

Join EUobserver

Support quality EU news

Join us