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European Commission Requires Slovakia to Remove Investment Restrictions on Pension Funds
30/06/2008 - 00:00
30/06/2008 - 23:59
Etc/GMT
The Ministry of Labour, Social Affairs and Family of the Slovak Republic declares that it is developing the amendments to the act on social insurance and pension savings. The statements was brought by ministry spokesman in just a few hours after the European Commission released the notice which requires Slovakia to remove investment restrictions in the private pillar of the country's pension system. Brussels said that the notice represents the second step in legal proceedings before countries are taken to European Court of Justice (ECJ).
In the EC's opinion, the problem lies in quantitative restrictions on investments, according to which the pension-savings companies are forced to invest 30 % of their assets in the Slovak capital market. In addition, they are not allowed to invest more than 20 % in securities issued by other EU-member states, or for which the guarantee has been provided by these countries. There is no such limit on Slovak securities, however. Brussels claims that these conditions prevent the free movement of capital between EU-member countries, because they make investments abroad impossible, or at least less attractive.
The EC doesn't accept the explanation provided by the Slovak authorities, which stated that such restrictions respect the public interest by creating economic and financial impulses that support the development of the Slovak capital market. Slovakia now has two months to send the EC a satisfactory answer. If it doesn't, the EC will be able to take legal action against Slovakia at the ECJ. The Ministry of Labour, Social Affairs and Family immediately informed that all investment restrictions criticized by the European Commission will be removed very soon.
"In the proposal of the amendment to the act on social insurance and pension savings, which is being prepared, these restrictions are removed," said the ministry spokesman. He added that the amendment should be discussed by the Slovak Government in the course of July.
(Created by Lubomira Kellerova)
In the EC's opinion, the problem lies in quantitative restrictions on investments, according to which the pension-savings companies are forced to invest 30 % of their assets in the Slovak capital market. In addition, they are not allowed to invest more than 20 % in securities issued by other EU-member states, or for which the guarantee has been provided by these countries. There is no such limit on Slovak securities, however. Brussels claims that these conditions prevent the free movement of capital between EU-member countries, because they make investments abroad impossible, or at least less attractive.
The EC doesn't accept the explanation provided by the Slovak authorities, which stated that such restrictions respect the public interest by creating economic and financial impulses that support the development of the Slovak capital market. Slovakia now has two months to send the EC a satisfactory answer. If it doesn't, the EC will be able to take legal action against Slovakia at the ECJ. The Ministry of Labour, Social Affairs and Family immediately informed that all investment restrictions criticized by the European Commission will be removed very soon.
"In the proposal of the amendment to the act on social insurance and pension savings, which is being prepared, these restrictions are removed," said the ministry spokesman. He added that the amendment should be discussed by the Slovak Government in the course of July.
(Created by Lubomira Kellerova)
news_source:
TASR
