European Policy Analysis Volume 2, Number 1, Spring 2016 | Page 40

Second Tier, Second Thoughts

called “2nd regime,” by the European
Commission. This “2nd regime” is
intended to trigger economies of scale
by defining highly standardized products
that should be attractive across the EU,
thereby creating a single market for
private pensions and stabilizing private
pensions as an ever more important
pillar of pension systems. Arguments
raised against this endeavor highlight
questionable demand, taxation problems,
regulatory challenges at the borderline
between EU member states’ jurisdictions,
distributional consequences, and the
broader normative framework of the role
of the state and private actors in pension
policies.

Initiated by a call for advice
from the Commission, EIOPA drafted a
discussion paper and asked any interested
stakeholders active in the sector to answer
a catalog of 70 questions following from
it. Our paper analyzes the resulting
stakeholder positions and EIPOA’s as well
as the Commission’s handling of them. We
focus on arguments justifying or criticizing
the creation of such a single market and
on the—sometimes surprising—emergent
advocacy coalitions. The paper pursues to
main goals. First, we aim at identifying the
stakeholders involved in the consultation
process and their positions and coalitions;
second, we investigate the reaction of
EIOPA and the European Commission
vis-à-vis the results of the consultation
process. Additionally, we discuss some
wider political implications, since the
consequences of EIOPA’s decisions
regarding the 2nd tier touch upon the
substance and legitimacy of European
policymaking in general.

The following section sketches
the current state of the single market
for private pensions, illustrates the link

between the euro crisis and the EU’s
looming pension crisis, and highlights a
number of distributional and regulatory
problems. Although this article is not
meant to be theory testing, it has a distinct
theoretical background which we will
sketch in Section 3. Findings are laid out
in Section 4, the first part of which deals
with three analytical topics (taxation,
distributional issues between different
providers, and the balance between the
three pillars of member states’ pension
systems) derived from our reading of
the political and regulatory contexts in
Section 2. The second part of Section 4
is concerned with the position EIOPA
adopted in the advisory process toward
the Commission and national regulators,
in terms of both policy content and
defining EIOPA’s institutional role. In the
conclusion, we also briefly touch upon the
repercussions of European regulation on
member states’ public pension policies,
especially the need to adjust minimum
pensions, guarantee schemes, and taxation
rules.

2. The Single Market for Private
Pensions in Perspective—From
Euro Crisis to Pension Crisis

T

he future of private pension
politics in the EU lies at the vortex
of three major policy streams
that figure highly on the European
Commission’s agenda: completion of the
common capital market, regulation of
systemic risks, and sustaining pension
adequacy. In turn, this leads to potential
ambiguities (and thus potential for
power struggles) between supranational
competencies,
intergovernmental
powers, and responsibilities that remain

40