David Natali

Altered Europeanisation of Pension Reform in the Context of the Great Recession: Denmark and Italy Compared

This article analyses the Europeanisation of national pension systems in Denmark and Italy. Through the analytical framework of a ‘two-level’ game, it analyses pension reforms in the two countries, which, in the wake of the crisis, breached EU budgetary requirements, and shortly after reformed their pension systems. The EU affects pension reform in both cases, but in distinct ways. When Denmark’s economy was financially vulnerable, the EU’s excessive deficit procedure affected the decision to reform pensions indirectly, by triggering a rapid political decision to speed up a pension reform. By contrast, the Italian economy’s critical vulnerability and the consequent risk for the whole Eurozone led to a situation whereby the European actors entered the domestic political scene and thereafter more forcefully induced reforms. The findings from the two cases show that the EU’s role in pension reform has been significant during crises, but through interaction with domestic actors. Furthermore, from a theoretical perspective, the intervening variables – domestic and EMU vulnerability as well as EU and domestic politics – are crucial to understanding the reform decisions through two-level games.

Reassessing South European Pensions after the Crisis: Evidence from Two Decades of Reforms

The article studies pension reforms in Greece, Italy, Portugal, and Spain between 1990 and 2013, focusing on three dimensions of change: multi-pillarisation, institutional harmonisation, and spending trends (cost-containment/expansion). The pension evolution of these countries is reassessed throughout the period of crisis and austerity. All countries encouraged the spread of private pensions and harmonised their fragmented public schemes. Cost containment was massive, putting future adequacy at risk. While international actors, especially the European Union, acquired a stronger role, that of organised labour declined. Spiralling between crisis and austerity, these systems changed and adapted, but still face old and new problems: inequality, risk individualisation, and increasing vulnerability to external shocks.

The Open Method of Coordination on Pensions: Does it De-politicise Pensions Policy?

Through the Open Method of Coordination (OMC) the EU has extended its role on pensions (that is a typical redistributive and nationally-rooted policy) while respecting national competencies and diversity. Such a governing mode is a hybrid: while OMC goes in many respects ‘beyond’ regulation, regulatory instruments are integrated in it. By shedding light on the normative and theoretical complexity of the OMC on pensions, the article analyses the conflicts of interest in the process and the main strategies for their management. The present study shows that three conflict dimensions (institutional, competence-based and ideological) are managed through two strategies: ‘participation control’ tends to structure the access to the process; ‘common knowledge production’ through reasoning and discursive decision-making tends to emphasise the role of experts. The eclectic use of both strategies confirms the hybrid nature of the OMC and the permanent tension between its supposed post-regulatory nature and the progressive specialisation and control of information that tend to exclude stakeholders and the large audience the process should mobilise.

The cross-border portability of supplementary pensions: Lessons from the European Union

Over the past 40 years, the European Union (EU) has developed the most advanced system of coordination of social security rights in the world, as a corollary to the free movement of workers. Notwithstanding, problems with the acquisition, transfer and fruition of supplementary pension rights still undermine labour mobility across the member states. This article aims to describe EU pension regulation in the field and illustrates how the EU has employed two different approaches to tackle the problem. The first approach is to directly facilitate the portability of supplementary pension rights – which deeply affects national social policy. The second is to develop transnational schemes leading to a single market for occupational pensions – an exercise in market-making integration. This article explores the main problems in implementing the portability principle and puts forward tangible solutions to unblocking the situation. This sheds light on the persistent tensions between supranational regulation and national pension policy, showing the need for a holistic strategy to resolve both institutional and technical issues.

The EU and Supplementary Pensions: Instruments for Integration and the Market for Occupational Pensions in Europe

Reliance on private retirement pensions is on the increase both at Member State level, via the spread of quasi-mandatory occupational plans, and at EU level, as a result of initiatives including the IORP Directive. This Working Paper analyses the legislative and market trends that underpin this development, assessing the impact of the global financial crisis, presenting the regulatory improvements required, and delineating the future prospects of the market for supplementary pensions.

Agents of institutional change in EU policy: the social investment moment

ABSTRACT The contribution addresses – through actor-centred historical institutionalism – why and how social investment (SI) emerged at the European Union (EU) level. SI policies built on the institutional basis of the policy co-ordination processes in employment and social inclusion, which originated in the late 1990s and early 2000s. The pre-existent processes represented the necessary but not sufficient condition for the EU SIP to materialise. The decisive factor was the activity of three types of entrepreneurs – intellectual, bureaucratic and political – that enabled the crystallization of the EU Social Investment package (SIP) through issue-framing, institutional alignment and consensus-building. Despite this, the SIP of 2013 ended as a ‘social investment moment’ that rapidly lost momentum because no additional measures such as indicators or funds were integrated with SIP. Furthermore, the Commission’s political priorities changed and the key entrepreneurs that had been active for the materialisation of the SIP were no longer centre stage. The continued presence of former influential entrepreneurs in the EU policy arena, although in different roles, may enable integration of EU SI into new EU social policy initiatives.

The White Paper on pensions: a critical reading

In January 2012 the Commission published the White Paper An agenda for Adequate, Safe and Sustainable pensions. The White Paper came at the end of a long process that began with the publication in 2010 of the Green Paper Towards adequate, sustainable and safe European pension systems. After months of consultations and some delay, the White Paper represents the most up-todate EU document on the present and future of pensions. This note has three aims. The first is to summarize some key aspects of the preparation of the White Paper. While consultations with national governments and stakeholders have been particularly intense, the publication has been influenced by the changing socio-economic and institutional context. On the one hand, the financial, economic and budgetary crises have intensified the challenges facing pension policy; on the other hand, EU policy-making seems to have changed in the new economic cycle: the interplay between those advocating policy ensuring the financial viability of pensions and those focusing on issues of social adequacy has been altered. The former group now dominates the European debate. Secondly, the note sheds light on the policy substance of the White Paper: active ageing and the raising of the statutory retirement age is seen as crucial in tackling demographic challenges and other constraints on the long-term viability of pension systems. The list of measures proposed by the document represents a significant improvement on the ideas included in the Green Paper of 2010. However, some of the assumptions are questionable and a number of the guidelines are not supported by coherent evidence (this is particularly the case with regard to the proposed development of the pension market purported to be the solution to the main problems). Thirdly, the note looks at EU governance and the risks involved in permitting the economic and financial dimension to dominate at the expense of pension adequacy. In the final part, the note focuses on the questions not addressed by the White Paper but which should be answered in the future.

Italian Welfare Reforms: Missed Opportunities for a Paradigmatic Change?

The Italian welfare state has experienced a huge reform trend in the last two decades. This has been consistent with a lengthy (and still limited) transition towards a more financially viable system of social policies; and a more effective labour market regulation. These trends have been confirmed in the last few years, when the Italian social and employment policies saw further reforms to address short- and long-term challenges.

Changing Multi-level Governance: The Regained Centrality of National Policy-makers in Recasting Pensions in Central Eastern Europe

In the field of pensions, analysts have stressed the progressive shift from hierarchical “command and control” (centred on the key role of national governments) to some forms of network and multi-level governance, in line with the increased emphasis on soft modes of regulation.1 One of the key dimensions of the “governance turn” is related to the increased role of international organizations (IOs). This is particularly the case of Central Eastern Europe (CEE), where IOs (like the World Bank — WB) and regional organizations (like the European Union — EU) have had an evident role in shaping national pensions policy.

A model for implementing sustainable and qualitative growth in the EU

The period since the outbreak of the financial, economic and social crises in Europe has witnessed a renewed focus on the need to develop a more sustainable and qualitative growth model. A model where the traditional focus on economic growth (i.e. GDP growth) is complemented by an adherence to a wider range of qualitative indicators. Indicators which more broadly characterise the well-being of society as a whole. This paper defines a model for sustainable and qualitative growth (SQG) in the EU and questions if existing EU economic and social governance arrangements are consistent with this wider approach to building a sustainable growth model. This paper identifies a number of key recommendations. First, a more encompassing, balanced and multi-dimensional EU strategy for growth should be adopted. This refined strategy should take into account the broader indicators underpinning the SQG model and should be addressed in key EU documents such as the Annual Growth Survey. Second, a symmetric and ‘time consistent’ macroeconomic strategy, allowing for investments in SQG related domains, should be pursued. These growth-enhancing investments should primarily target relevant policy areas such as education and training, technological innovation and lifelong learning strategies. Third, a common automatic stabiliser in the EU should be set up in order to provide a minimum level of EU investment across all member states.