FT: Finance Ministers set to agree EU Pension Reforms

30 May 2002

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“European finance ministers may be ready to agree long-awaited reforms next week to allow pension funds to operate across Europe”, Financial Times reports in an today published article. “Experts from the European Union's 15 ministers were understood yesterday to have agreed a compromise to break an 18-month deadlock on the plans, despite opposition from the French government. Approval of the plans at next Tuesday's meeting of finance ministers would be a victory for the Spanish government, which made pension funds legislation a priority of its six-month presidency of the EU.”

Under the plans, funds operating across borders will be banned from investing more than 30 per cent of their assets in high-risk securities, such as hedge funds and derivatives. They will also be forbidden from investing more than 5 per cent of their portfolio in a single share or bond and in their own company.

People close to the discussion said that yesterday's meeting had reached broad agreement on most issues, although France had held out for more changes. The Paris government is understood to be reluctant to back the Spanish compromise before next month's parliamentary elections. EU diplomats expressed hope that the French would withdraw their opposition before Tuesday but added that the remaining 14 states could approve the rules without the backing of Paris.

See FT article

© Financial Times