European Policy Analysis Volume 2, Number 1, Spring 2016 | Page 61

European Policy Analysis

5. Conclusion

default solutions and electronic
platforms) and this way encourage
more consumers to buy a PPP. This
would be beneficial for reducing
distribution costs and reaching
the critical mass that is needed for
providers to offer cost effective
products and reach economies of
scale. (EIOPA 2014b, Paragraph 269).

A

close reading of the growing
body of primary sources on a
more integrated common market
for private pension products reveals
major divisions between the European
Commission and certain large providers,
on the one hand, and several member
states as well as smaller suppliers that are
more attuned to the existing particularities
of national markets on the other. EIOPA
as a pan-European regulatory body
charged with the wider task of hedging
systemic risk in the occupational and
private pension sectors finds itself in a
rather delicate dilemma. The Commission
insistently expects it to devise a 2nd tier
regulation embodied in a standardized
PPP that ought to be attractive for all EU
citizens. Yet, this endeavor runs the risk of
unsettling the balance between the pillars
of the 28 distinct national retirement
provision policies, and it is hardly
conceivable without far-reaching tax
harmonization for which neither EIOPA
nor the Commission have the necessary
competence, albeit the latter’s DG GROW
clearly harbors a sustained ambition.
While resistance against tax harmonization
remains strong, a prolonged phase of closeto-zero real interest rates might present a
window of opportunity, since nonexistent
profits render no revenue no matter what
the tax rate is.

This pattern clearly speaks to
our theoretical assumptions about
crisis policymaking. The fact that the
Commission repeatedly urges EIOPA to
generate far-reaching policy advice is in
line with the expectation that experts and
interest groups have considerable influence
on policymaking when the complex

Strikingly, EIOPA even claims
that while usually PPPs should not
be bought without “the benefit of
independent professional advice” (EIOPA
2014b,Paragraph 490), this were not the
case in the 2nd regime. Here, EIOPA trusts
and advises the public to trust solely in
its own “generic advice suitable for the
vast majority of citizens that could be
disseminated through government or
public agencies” (EIOPA 2014b, Paragraph
490).

Thus, while a number of details
remain very cloudy, EIOPA counsels the
Commission—in a very idiosyncratic
reading of the stakeholder feedback it
received—to use the cover of consumer
protection to pre-emptively depoliticize
pension policies and to channel a
potentially huge segment of the market for
PPPs to a limited range of large providers
that are likely to be able to comply with
EIOPA’s regulatory demands (that are
sketched in Paragraphs 271–292 of EIOPA
2014b). Furthermore, EIOPA strives to
monopolize the advice citizens receive on
PPP investment decisions. It is remarkable
that an initiative with such far-reaching
distributional consequences for both
consumers and providers of PPPs and of
member states’ pension policies in general
have so far received hardly any public or
academic attention.
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