Friday

27th May 2016

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

"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.

Investigation

EU commission reshuffles car emissions expert

Move takes place amidst frustration with MEPs investigating dieselgate over lack of cooperation from the commission's in-house think tank. An interview was prevented from taking place.

Analysis

How Portugal's leftist 'contraption' works

After six months in power, the improvised left-wing coalition between socialists, leftists and communists has managed to rule and even thrived, to many Portuguese's surprise.

Stakeholders' Highlights

  1. EPSUTrade Unions Back New Undeclared Work Platform
  2. European Healthy Lifestyle AllianceCould targeting children’s fitness boost academic performance?
  3. World VisionDeclares the World Humanitarian Summit a Positive Step in a Longer Journey to Ending Need
  4. EJCPresident Dr. Moshe Kantor on Brexit and the Jewish Question
  5. Swedish EnterprisesNew rules for posted workers - Better Protection or the End of Posting ?
  6. World VisionWhy The EU Needs to Put Children at the Centre of Emergencies - In Their Words
  7. ACCASustainability Reporting in Danger of Losing Its Momentum Says ACCA and CDSB
  8. Dialogue PlatformDiversity as Heritage of Humanity! Join the “Colors of the World“ Show at the EP
  9. Centre Maurits CoppietersNew Responses to the Basque Peace Process? MEP Juaristi on Stateless Challenges Conference
  10. European Healthy Lifestyle AllianceImproving Cardiovascular Health Begins by Closing the Gap in Sex Disparities
  11. IPHRBrussels Talks to Take Stock of Human Rights in Turkmenistan
  12. Belgrade Security ForumOpen Call for Applications! Join the Events Team at the 6th Belgrade Security Forum.

Latest News

  1. Perceptions over South China Sea dispute are simply wrong
  2. Tech companies eye opportunites in refugee crisis
  3. EU commission reshuffles car emissions expert
  4. Poland's economy feels the heat of rule of law talks
  5. Sweden tightens Nato ties
  6. How Portugal's leftist 'contraption' works
  7. Dire pre-trial prison conditions in some EU states
  8. Savchenko release to revive peace process, EU hopes