AEIP Newsletter • Week 24

14 – 18 June 2010

Table of Contents

EU FINANCIAL SERVICES............................................................................................................................... 2
I. CONSULTATION ON NAKED SHORT-SELLING ..................................................................................................... 2
II. PARLIAMENT READY TO LEGISLATE AS SOON AS POSSIBLE ON DERIVATIVES .................................................. 2
III. EC CONSULTS ON DERIVATIVES AND NAKED SHORTING RULES...................................................................... 2
EU INTERNAL MARKET .................................................................................................................................. 3
I. MERKEL, SARKOZY EYE WATERED-DOWN ECONOMIC GOVERNANCE ............................................................... 3
EU HEALTH ......................................................................................................................................................... 4
I. PARLIAMENT RAISES FRESH DOUBTS ABOUT EU HEALTH BILL ......................................................................... 4
EU SOCIAL AFFAIRS......................................................................................................................................... 4
I UK THINK TANK CALLS FOR AUTO-ENROLMENT INTO ISAS .............................................................................. 4
II. IMF WARNS SLOVENIA PENSION REFORM IS CRITICAL TO FISCAL STABILITY .................................................. 4
III. DC IS PREFERRED VEHICLE FOR UK AUTO-ENROLMENT, SAYS PWC ............................................................. 5
IV. SELF-EMPLOYED WORKERS TO GAIN MATERNITY AND PENSION BENEFITS UNDER NEW EU LAW ................... 5
V. SLOVENIA GOVERNMENT WATERS DOWN SECOND-PILLAR REFORM ................................................................ 5
VI. DUTCH RECOVERY PLANS NEED HIGHER PENSION AGES AND CONTRIBUTIONS: OECD.................................. 6
VII. FRANCE TO INCREASE RETIREMENT AGE TO 62 IN BID TO TACKLE DEFICIT ................................................... 6
ECONOMY ........................................................................................................................................................... 7
I. MEASURES TAKEN BY 12 MEMBER STATES ARE SATISFACTORY - CYPRUS, DENMARK AND FINLAND ALSO
INVOLVED IN EXCESSIVE DEFICIT PROCEDURES ................................................................................................... 7
II. COMMISSION'S 2010 REPORT ON PUBLIC FINANCE CALLS FOR STRICTER BUDGET DISCIPLINE AND CLOSER
SURVEILLANCE .................................................................................................................................................... 7
III. OUTPUT FALLS IN EUROZONE CONSTRUCTION SECTOR - STABILITY IN EU27 ................................................ 8
EVENTS AND COURT CASES.......................................................................................................................... 8
I. PROMOTION OF MENTAL HEALTH AND WELL-BEING IN OLDER PEOPLE– MAKING IT HAPPEN ........................ 8
II. EU OPEN HEALTH FORUM .............................................................................................................................. 8
III. THE UK ECONOMY, POST-RECESSION – SAME AS IT EVER WAS? .................................................................... 9
IV. EUROPEAN COURT OF JUSTICE CALENDAR" .................................................................................................. 9
IN DEPTH ANALYSIS ...................................................................................................................................... 10
I. UK THINK TANK CALLS FOR AUTO-ENROLMENT INTO ISAS ........................................................................... 10
II. DUTCH RECOVERY PLANS NEED HIGHER PENSION AGES AND CONTRIBUTIONS: OECD ................................. 11

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EU Financial Services

EU Financial Services

I. Consultation on naked short-selling

The European Commission has started a public consultation exercise that will run until Saturday 10
July for market players and regulators on options for forthcoming EU legislation on short-selling. It will
be asking what role the new European Securities Markets Authority (ESMA), included in the financial
package, could play in any ban on speculative short-selling for emergency situations. The consultation
will be followed by draft legislation in September. France and Germany recently increased pressure on
the European Commission to speed up work in this field. Short selling is the sale of a security that the
seller does not own, with the intention of buying back an identical security at a later point in time in
order to be able to deliver the security. Short selling can be divided into two types: (1) "Covered" short
selling is where the seller has borrowed the securities, or made arrangements to ensure they can be
borrowed, before the short sale; and (2) "Naked" or "uncovered" short selling is where the seller has
not borrowed the securities at the time of the short sale, or ensured they can be borrowed. The
Commission believes that short-selling can increase market liquidity and hedge against risk but
abusive short-selling can lead to lower market values and impact on financial stability. In the face of
the range of reaction from the member states to speculation on sovereign debt credit default swaps in
the eurozone, the Commission suggests that new regulation be introduced to increase transparency in
short-selling, cut the risks associated with naked short-selling and ensure coordination at EU level of
emergency action by member states' authorities. (14/06/2010 Agence Europe)

II. Parliament ready to legislate as soon as possible on derivatives

The European Parliament has adopted, without amendment, the draft own initiative report by Werner
Langen (EPP, Germany) on future policy initiatives on the derivatives market (see EUROPE 10154). It
calls for European legislation which will bring transparency and reduce risks in a market worth
€600,000 billion. “What we need is more transparency in the derivatives markets. Our resolution is a
clear signal to the Council and the Commission to get EU legislation going as soon as possible.
Derivatives play a role in minimising risk, but they can also be used for speculative purposes,” Langen
says in a press release. Ahead of the plenary session, no amendments were lodged. Only the
European Conservatives and Reformers called for a separate vote for a dozen amendments.
The European Parliament has now come into line with the European legislative initiative, currently put
to public consultation, to run until 10 July (see EUROPE 10159) and which the European Commission
is likely to present at the start of September. It backs: - clearing of standardised derivatives in central
counterparties (CCPs); - the new European Securities and Marketing Authority (ESMA) playing a
major role on approval and supervision of CCPs and trade repositories, which are responsible for
collecting and maintaining the records of transactions in derivatives; - derivatives which continue to be
traded bilaterally being subject to stricter capital requirements; - credit default swaps being banned.
The rapporteur acknowledged that there was “some controversy” in the EP over derivatives issued by
third countries. “A majority of MEPs call for all derivatives with either an EU currency denomination, or
those that are related to an EU company, or those any financial institution in the EU deals with, to be
cleared and settled in the EU,” he said. (15/06/2010 Agence Europe)

III. EC consults on derivatives and naked shorting rules

The European Commission is asking interest groups for fast input on various points as it draws up its
own proposals to regulate derivatives and naked shorting. Both positions are due in early September.
Two consultation exercises are being opened, each with a closing date for the answering of questions,
set at 10 July. Announcing both consultations, David Wright, deputy director general of the
Commission's internal market division, said the Commission wanted information from EU member
states, market participants and other stakeholders on the measures aimed at making derivatives
markets and market infrastructures more resilient. The aim is to avoid fragmentation, he said. The
questionnaire, which contains detailed notes on various options under consideration, says the

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Commission's moves follow outline positions agreed by the G20. It is now in the process of finalising
its draft legislative proposals. Before doing so, it needs to obtain views on four specific issues. These
concern clearing and risk mitigation of over-the-counter derivatives, requirements for central
counterparties, interoperability and reporting obligations and requirements for trade repositories. On
proposed rules for short selling, the EC said pan-EU harmonisation would increase the "resilience and
stability of financial markets". Wright noted that, at present, the member state governments were
applying different rules. Eight have banned shorting, while another seven have applied temporary
bans. The EC said policy options could be grouped into three types: rules to increase transparency
related to short sales rules to reduce risks of uncovered short selling; and, emergency powers for
competent authorities to impose temporary short selling restrictions. Reactions to the consultations
will be assessed during the summer break. (15/06/2010 IPE.com)

EU Internal Market

EU Internal Market

I. Merkel, Sarkozy eye watered-down economic governance

Following a meeting in Berlin on 14 June, German Chancellor Angela Merkel and French President
Nicolas Sarkozy agreed to put forward a compromise plan for an "economic government" of the EU. In
a show of unity amid growing doubts about the capacity of the French-German couple to steer the
Union, the two leaders tabled a number of proposals ahead of the 17 June EU summit. Dropping his
earlier insistence that there should be a formal institution to steer the economic governance of the
euro zone, Sarkozy accepted Merkel's suggestion that regular EU summits should play that role. In
response, Merkel accepted that in case of emergency, there would be informal ad hoc meetings of
eurozone members. The two leaders also agreed that governments who breach the Union's budgetary
discipline should have their voting rights suspended. Sarkozy, who until now had not favoured punitive
measures, said that it was not clear if there was a need to change the EU treaty for that purpose. "If a
treaty change is needed we will propose it," he said. Merkel and Sarkozy also said they will request
that G20 leaders back a tax on banks for all international financial transactions at a summit in Toronto
on 26-27 June. Canada led opposition to the introduction of such a tax when finance ministers from
the Group of 20 economic powers met in South Korea earlier this month, but Sarkozy and Merkel
made clear they were not prepared to drop the idea. Merkel said she and Sarkozy would be writing to
Canadian Prime Minister Stephen Harper to inform him of what the "conditions" would be for holding
the meeting. Spain denies EU rescue bid In the meantime, Spain admitted that the European
financial crisis is taking a toll on the country's banks, with foreign banks refusing to lend to some.
Spanish Treasury Secretary Carlos Ocana admitted officially for the first time that some Spanish
banks faced a liquidity freeze in the interbank market and said the government was working to restore
confidence. Merkel was asked about media reports that Madrid could seek aid from the new 750 billion
euro European Financial Stability Facility as early as this week. "If there should be problems - and we
shouldn't talk them up - the mechanism can be activated at any time," Merkel said. "Spain and any
other country knows that they can make use of this mechanism if necessary." The German Finance
Ministry and the European Commission denied a report in the Frankfurter Allgemeine Zeitung that EU
states would hold talks on aiding Spain in Brussels this week. (15/06/2010 Euractiv.com)

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EU Health

EU Health

I. Parliament raises fresh doubts about EU health bill

Last week's landmark agreement by EU health ministers on cross-border healthcare has been hailed
as a breakthrough but members of parliament, doctors and patient groups say more work still needs to
be done before the new rules can be implemented. The bill now goes back to the European
Parliament, which has already backed a more far-reaching version of the directive. A majority of MEPs
will have to vote in favour of a revised text before it can become law. European governments have
accepted a compromise that will see patients reimbursed for medical treatment in other EU member
states, but are insisting on a series of safeguards giving health authorities the power to prevent
patients from travelling under certain circumstances. There was also greater clarity on who should pay
for treating pensioners who take up residence in another member state during their retirement – a
complex issue that required detailed behind-the-scenes negotiations ahead of the ministerial meeting.
For example, in most instances, the agreement says a French pensioner living in Spain will be
reimbursed by the Spanish state if they seek treatment in Germany. But France would pick up the tab
if that pensioner were to be treated in France. (15/06/2010 Euractiv.com)
EU Social Affairs

EU Social Affairs

I UK think tank calls for auto-enrolment into ISAs

Pensions and Individual Savings Accounts (ISAs) should be brought closer together through tax
harmonisation and auto-enrolment into ISAs in an effort to boost long-term savings in the UK, a report
from the Centre for Policy Studies has argued.
In depth analysis page: 10

II. IMF warns Slovenia pension reform is critical to fiscal stability

The International Monetary Fund (IMF) has warned Slovenia comprehensive pension reforms in the
country are "critical" to ensuring long-term fiscal sustainability. In a statement outlining the preliminary
findings from its latest mission to Slovenia, the IMF noted the country had been hit hard by the global
crisis and that, while its policy response had been appropriate, the crisis had altered external financial
conditions and Slovenia's growth pattern needed to adapt to this. The IMF recommended the country
aim for "more balanced and sustainable growth in the future", while the fiscal deficit should be reduced
in a sustainable way in the medium term. With regard to reducing the deficit, the IMF concluded
implementing comprehensive pension reform was a key goal and "critical to ensure long-term fiscal
sustainability". The IMF said changes were needed to address the adverse demographics of an
ageing population, as age-related expenditure in Slovenia is already increasing in the short term and
expected to reach 13% of GDP over the long term. In particular, the IMF recommended any pension
reforms include a delinking of pension indexation from wages, the increase in the minimum retirement
age and eventually a transition from the current defined benefit scheme into a notional defined
contribution scheme. Last year, the Slovenian government put forward plans to try and increase
incentives for private savings and to work longer through an increase in the retirement age. However,

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the IMF claimed these measures would not be enough to ensure the long-term sustainability of the
pension system. (14/06/2010 IPE.com)

III. DC is preferred vehicle for UK auto-enrolment, says PwC

Most employers expect to use defined contribution (DC) schemes to comply with auto-enrolment
legislation from 2012, as more than one in 10 intend to reduce or close their existing defined benefit
(DB) schemes, a study from PricewaterhouseCoopers (PwC) has claimed. Figures from PwC's latest
pension survey of 179 employers, including 38 FTSE 100 companies, showed just 6% of respondents
intended to retain their DB schemes in their current form. Further, the number of companies that have
shut their final-salary schemes to existing employees more than doubled, from 14% in 2009 to 32%.
The survey found almost all employers expected to use a DC scheme to comply with their legal duties
from 2012, with 69% of respondents not yet fully understanding the cost and other implications of
auto-enrolment on their business. Marc Hommel, pensions partner at PwC, said the cost to employers
could eventually be "up to £1,000 a year" per affected individual. "Retail, leisure and construction
sectors will be particularly hard hit, where currently up to 90% of employees do not have pensions
provision," he said. "This is a pressing issue for those employers who need to plan for this financial
outlay, and who risk financial penalties and reputational risk for failure to comply." Other findings from
the survey showed the number of companies dealing with legacy pensions through enhanced transfer
values increased from 4% last year to 8%, while 53% of respondents intend to offer enhanced
transfers in the future. This is despite recent comments from the Pensions Regulator (TPR) that, in the
case of cash-enhanced transfer values, trustees of DB schemes should start from the position that it is
not necessarily in the members' best interests. However, Hommel said: "When offering deferred and
current pensioners these choices, it is essential employers and trustees make sure the individuals
concerned are put in a position where they can make properly informed, non-pressurised decisions."
Adherence to regulatory guidance, excellent communication, comprehensive information and access
to highly qualified independent advice are all essential to this purpose, he added. (14/06/2010
IPE.com)

IV. Self-employed workers to gain maternity and pension benefits under new EU law
Self-employed workers and their partners will enjoy better social protection – including the right to
maternity leave for the first time – under new legislation endorsed by EU governments on June 7,
2010. The Directive on self-employed workers and assisting spouses repeals and replaces an earlier
law and improves the social protection rights of millions of women in the labour market, boosting
female entrepreneurship. At present, women represent only one in three entrepreneurs. The
legislation, agreed with the European Parliament on 18 May and endorsed today by EU Member
States, considerably improves the protection of female self-employed workers and assisting spouses
in case of maternity or motherhood. It will provide equivalent access to maternity leave as for
employees, but on a voluntary basis. At EU level, this is the first time a maternity allowance has been
granted to self-employed workers. The new rules will also serve to promote entrepreneurship in
general and among women in particular. There is a currently a major gender gap in this area – only
30% of entrepreneurs in Europe are women. Finally, the provision on social protection for assisting
spouses and life partners (recognised as such in national law) is also a considerable improvement
from the 1986 Directive. They will have the right to social security coverage (such as pensions) on an
equal basis as formal self-employed workers. This will help to provide a stronger social safety net and
to stop women from falling into poverty. The Council of Ministers is now expected to formally adopt the
legislation on 24 June 2010. EU countries will then have two years to introduce it into national law.
Where justified by particular difficulties, they may have an additional period of two years to implement
the provisions concerning assisting spouses. (eu.europoa.eu)

V. Slovenia government waters down second-pillar reform

Second-pillar funds in Slovenia will not have to shift from insurance funds to mutual funds under a new
pension reform proposal, the government has said. As part of a major overhaul of the first and second
pillars, the Slovenian government had aimed to increase transparency in the system by forcing those

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pension companies that offer insurance-based pension plans to adopt a mutual fund structure. This
would have made it compulsory for the funds to re-sign contracts with each of the 500,000 members in
the system. Miroslav Ekart, executive director of the €185m PRVA pension fund company, the largest
in the voluntary system, said the move would have been "quite dramatic". "As the Slovenian second
pillar is quite mature and no longer a major growth market, we do not have enough sales personnel to
get all contracts re-signed within six months," he said. He added that sales activities had also been
reduced in the wake of the crisis, as companies are postponing their decisions on whether or not to
join the second pillar. However, the government has opted to make changes that are easier to
implement. Those will include a change in the pension calculation in insurance funds to make it more
comparable with that of mutual funds, which use investment units to calculate pensions. Mutual funds
may have to switch to international accounting, which insurance funds are already doing. To boost
participation, the government also aims to force companies that join the second pillar to include all
their employees instead of the currently mandatory 51%. Ekart said: "This suggestion is OK with us,
but we want the possibility for individuals to opt out if they absolutely do not want to join the system."
Pension funds also opposed a proposal to put in place hefty fines for late contribution payments by
companies, as "the system is still voluntary and not mandatory", Ekart added. The reform is scheduled
for vote in the autumn. A major point of discussion remains the first pillar and necessary changes to
the retirement age, which the government wants to hike prior to 2015, as this will be the year from
which baby boomers start to retire. (15/06/2010 IPE.com)

VI. Dutch recovery plans need higher pension ages and contributions: OECD
Increasing life expectancy and the recent financial crisis are threatening the solvency of the second-
pillar pension system in the Netherlands, leading to a need for changes to the style of recovery plans,
the OECD has warned. In its latest economic survey of the Netherlands, the OECD devotes an entire
chapter to making the pension system less vulnerable to financial crises. It highlighted the recent fall in
funding ratios of pension funds from an average of more than 140% to less than the minimum 105%,
marking the second time in 10 years that recovery plans have had to be widely implemented.
The OECD pointed out these recovery plans mainly rely on suspending indexation of pension rights
and accrued pension rights.
In depth analysis page: 11

VII. France to increase retirement age to 62 in bid to tackle deficit

France's statutory retirement age is set to increase to 62, according to government plans unveiled
today. Under proposals outlined by Labour minister Éric Woerth this morning, the statutory retirement
age will gradually increase from 60 to 62 by 2018. Woerth said the move was necessary, as life
expectancy had increased by three years since 1980, when the current retirement age had been
agreed. Further, the minister argued the move should allow the government to break even and combat
a growing pensions deficit, with savings of €18bn being made. He said these savings could not have
been achieved simply by increasing the contribution period. Philippe Desfossés, chief executive of
ERAFP, the French civil service supplementary pension scheme, welcomed the reforms. "All other
things equal, this should increase the size of ERAFP and also further improve its solvency, which is
already satisfactory," he said. "However, these changes will occur only gradually, and it remains to be
seen whether the actual retirement age will increase as much as the legal one. "Furthermore, it should
not be forgotten that this move, raising legal retirement age, is motivated by a life expectancy that
keeps on increasing." The announcement brings to a close months of speculation over the extent of
reforms. Without changes the retirement age, France's state pension deficit was expected to hit
between €72bn and €115bn by 2050 in calculations made by the Conseil d'orientation des retraites
(COR), the country's leading pension advisory body. The reforms will go hand in hand with an already
implemented increase in minimum contribution period. Currently, at 40.5 years, it is set to increase to
41.5 by 2020. COR had previously suggested that, without reforms, the minimum contribution period
would have to be increased to 43.5 years by 2050 if pensioners wished to continue relieving a full
pension. Desfossés said he did not expect the announcement to change pension funds' investment
patterns greatly in the short term. "This regulatory modification does not materially change our

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investment objectives and constraints, though a more detailed analysis will be conducted during the
annual asset/liability management review," he said. Despite the announcement, all proposals still have
to be agreed by Parliament, which is expected to address the issue in September. (16/06/2010
IPE.com)

Economy

Economy

I. Measures taken by 12 member states are satisfactory - Cyprus, Denmark and Finland also
involved in excessive deficit procedures
On Tuesday 15 June, the European Commission concluded that measures taken by 12 member
states were sufficient to correct their excessive deficit within the set timeframe. Belgium, the Czech
Republic, Germany, Ireland, Spain, France, Italy, the Netherlands, Austria, Portugal, Slovenia and
Slovakia took measures in response to the Council recommendations (see EUROPE 10032) and so
are appropriate to achieve objectives for 2010. In most cases, however, things will have to be tweaked
a little if targets are to be reached for the following years, Economic and Monetary Affairs
Commissioner Olli Rehn told press as he presented the outcome of the college meeting. “The current
budgetary targets appear to ensure an appropriate overall fiscal stance for the EU,” he said. For Spain
and Portugal, beyond the assessment of effective action, the adequacy of the new announced targets
and measures was also assessed. The new objectives were appropriate, the Commission said. Spain
and Portugal are expected to specify measures in their 2011 budgets amounting to 1¾% and 1½% of
GDP respectively in order to attain these new targets. On 13 July, the Ecofin Council will decide on all
12 cases and on the Commission recommendations that new procedures be opened against Cyprus,
Denmark and Finland. The Commission has concluded that there are excessive deficits in these three
countries (recommendations under Article 126(5-7) of the Treaty on the Functioning of the EU). The
case of Bulgaria will be examined once clarification has been brought on certain statistical data (see
EUROPE 10156). Bulgaria will also be involved in an excessive deficit procedure, so that only three
member states - Estonia, Luxembourg and Sweden - will not be subject to such a procedure.
(15/06/2010 Agence Europe)

II. Commission's 2010 report on public finance calls for stricter budget discipline and closer
surveillance
“Events in the spring of 2010 exposed the urgency of addressing the fiscal challenge in the euro area
and the EU. Sovereign risk premiums increased to unprecedented levels in member states with
perceived high budgetary and macro-financial risks”, explains the European Commission's “2010
Report on Public Finances in EMU” that presents recent budgetary developments, reports on
developments in budgetary surveillance and draws lessons for debt-reduction strategies. It also
investigates the link between macro-financial and budgetary risks.This year's edition of the Report on
Public Finances reviews how member states' fiscal policies have evolved in the wake of the financial
and economic crisis. It assesses the prospects for public finances and policy needs ahead. The strong
deterioration in public finances, with the EU average general government budget deficit forecast to
reach more than 7% of GDP in 2010 and the debt ratio rising correspondingly, is due to both the
automatic effect of economic performance and the discretionary support measures introduced by EU
governments. With real economic growth having fallen to -4.2% in 2009, there has been an automatic
decrease in revenues and increase in spending as a share of GDP. The credit and asset price led
boom that preceded the crisis in many member states has increased the impact of the recession on
the public finances as related previously substantial revenues have dried up. Discretionary support
measures introduced to support both aggregate demand and the financial sector specifically have also

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added to the burden on the public finances. Already in autumn 2009, the EU agreed on a fiscal exit
strategy that should be co-ordinated and differentiated across countries in the framework of a
consistent implementation of the Stability and Growth Pact (SGP), taking account of fiscal risks and
macro-financial imbalances. (16/06/2010 Agence Europe)

III. Output falls in eurozone construction sector - Stability in EU27

Figures published by Eurostat on 17 June indicated that in April 2010, compared with March 2010,
construction output was down by 0.3% in the euro area (EA16) and remained stable in the EU27. In
March, production rose by 6.5% and 6.0% respectively. Compared with April 2009, output in April
2010 dropped by 6.1% in the euro area and by 4.3% in the EU27. Compared to March 2010,
construction output fell in eight member states, notably in Hungary (-8.1%), Spain (-4.9%) and
Portugal (-3.7%), rose in five, notably in Slovakia (+9.0%), the Czech Republic (+4.8%) and Germany
(+2.6%) and remained unchanged in the Netherlands. Building construction fell by 0.9% in the euro
area and by 1.2% in the EU27, after +9.2% and +7.2% respectively in March. Civil engineering
increased by 3.4% in the euro area and by 3.0% in the EU27, after +0.9% and +1.5% respectively in
the previous month. Compared to April 2010, construction output fell in eleven member states and
rose only in Sweden (+9.1%), Germany (+4.8%) and the United Kingdom (+0.9%). The largest
decreases were registered in Bulgaria (-22.7%), Spain (-18.5%) and Romania (-17.2%). Building
construction decreased by 6.0% in the euro area and by 4.9% in the EU27, after -3.2% and -3.0%
respectively in March. Civil engineering dropped by 6.5% in the euro area and by 0.8% in the EU27,
after -14.1% and -6.7% respectively in the previous month. (17/06/2010 Agence Europe)
Events and Court Cases

Events and Court Cases

I. Promotion of Mental Health and Well-being in Older People– Making it happen

In Madrid, 28th - 29th June 2010 - there will be the third in a series of invitation-only events covering
mental health throughout the lifespan, in line with the priority areas of the European Pact for Mental
Health and Well-being. Objective of the conference: 1) Raise visibility about the importance of
promoting mental health and well-being in older people; 2) Enable an exchange at EU-level on policy
activities, good practices by stakeholders and research projects in Member States, supported by the
database European Compass for Action on Mental Health and Well-being; 3) Draw conclusions
summarising the conference outcomes. Main themes of the conference: The conference is structured
around five sub-themes: 1. Mental health promotion in old age: Healthy ageing and well-being; 2.
Prevention of mental disorders and promotion of autonomy; 3. Older people in vulnerable situations; 4.
Health systems for care and treatment; 5. Supporting the informal carers.

II. EU Open Health Forum

th th
In Brussels, 29 - 30 June 2010 - Registration for the EU Open Health conference is welcome from
all interested parties and/or organisations from the broader community of interest in EU health policy.
This conference aims to contribute and increase the profile of health in all policies through discussion
between EU policy makers and stakeholders on pressing public health issues and their impacts on the
Community. The EU Open Health Forum is a mechanism for the European Commission to get
feedback from stakeholders on the implementation of the EU Health Policy and to identify the need for
new policy initiatives at EU level. It also facilitates networking and exchange of best practice in the
implementation of public health policies at EU, national, regional and local level.

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III. The UK economy, post-recession – same as it ever was?

th
In Brussels 29 June 2010 - This workshop will to bring together leading academics and analysts as
well as policymakers to discuss the economic performance of the UK economy during the decade up
to and including the economic and financial crisis, and it will draw conclusions about short-term
recovery prospects and the longer-term UK economic outlook. The workshop comprises three
sessions, each one dedicated to a specific economic theme, and the event will be rounded off by a 90
minute panel discussion with numerous high-level panelists. During the three thematic sessions, a
number of academic papers will be presented by the corresponding authors alongside presentations
from other speakers, and each session will be concluded by a general discussion lead by an
appointed discussant. The topics discussed in the three sessions and the panel discussion are: 1.
Cycle versus Structure: Appraising the UK's pre-crisis growth performance; 2. Monetary and financial
exit strategies for a return to growth; 3. Long term sustainability issues in the UK's public and
household sector; 4. Panel discussion: (Re-)Defining the UK's position in the EU and global economy.

IV. European Court of Justice Calendar"

Date Case Language Courtroom

Judgment Commission v Spain - Freedom to ES New Great

provide services Courtroom
C-211/08 Court of Justice - Grand Chamber
Tuesday
15/05/2010 Infringement of Article 49 EC and Article 22(1)(a)(i) of Council Regulation (EEC) No
09:30 1408/71 of 14 June 1971 on the application of social security schemes to employed
persons, to self-employed persons and to members of their families moving within the
Community (OJ 1971 L 149, p. 2) – Non-reimbursement of hospital costs incurred
abroad – Exceptional circumstances Advocate General : Mengozzi

Judgment Commission v Portugal - Freedom to PT Courtroom III –

provide services Level 6
C-105/08 Court of Justice - First Chamber
Thursday
17/06/2010 Failure of a Member State to fulfil its obligations – Infringement of Articles 49 EC and
09:30 56 EC – Difference in treatment of taxation of interest paid to financial institutions
depending on whether they are resident or not in Portuguese territory Advocate
General : Kokott

Opinion Commission v Portugal - Free PT New Great

Thursday C-20/09 movement of capital Courtroom
17/06/2010 Court of Justice - Second Chamber
09:30
Failure of a Member State to fulfil its obligations – Infringement of Articles 56 EC and
40 EEA Agreement – Public debt securities – Preferential tax treatment for securities
issued by the Portuguese State Advocate General : Mengozzi

Judgment Luxembourg v Commission - Social FR Courtroom II -

policy Level 8
T-549/08 General Court - Eighth Chamber
Friday
18/06/2010 Annulment of Commission Decision C(2008) 5383 of 24 September 2008 on the
09:30 suspension of interim payments from the European Social Fund (ESF) to the single

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programming document for Community structural interventions falling under

Objective No 3 to the Grand Duchy of Luxembourg (File CCI No 1999LU053DO001),
and Commission Decision C(2008) 5730 of 6 October 2008 on the suspension of
interim payments from the Community initiative to combat discrimination and
inequality in the employment market (EQUAL) to the Grand Duchy of Luxembourg
(File CCI No 2000LU050PC001), following the finding of alleged serious
inadequacies in the management and control systems capable of leading to systemic
irregularities

In Depth Analysis

In Depth Analysis

I. UK think tank calls for auto-enrolment into ISAs

Pensions and Individual Savings Accounts (ISAs) should be brought closer together through tax
harmonisation and auto-enrolment into ISAs in an effort to boost long-term savings in the UK, a report
from the Centre for Policy Studies has argued.

Michael Johnson, a pension and saving policy analyst and author of the report Simplification is the key:
stimulating and unlocking long-term saving, claimed two differently taxed businesses – pensions and
savings – were competing for the same client base where the landscape for long-term savings was
already very complex.

He argued fewer savings resulting from the current complex tax and product regimes meant less long-
term investment and lower economic growth over the long term.

Johnson put forward 16 measures that could help simplify saving and improve flexibility by bringing
ISAs and pensions closer together.

In addition to a unified tax framework for the two types of product, he proposed a contribution limit of
£45,000 a year for all tax-incentivised saving, of which £35,000 would be the maximum contribution to
a pension.

The proposals from the Centre for Policy Studies, a think-tank established to promote the principles of a
free society, also include allowing people the opportunity to withdraw up to 25% of their pension
savings tax free before pension age.

This sum would then be deducted from the 25% tax-free entitlement at retirement.

Other recommendations included allowing income from annuities purchased with ISA funds to be
exempt from income tax and allowing unused pension assets to be passed to third parties, up to a limit
of around £100,000, provided they be invested in a pension in an effort to "reinforce a sense of
personal ownership of pension savings".

Johnson also argued that because people have been shown to prefer saving in ISAs rather than
pensions, the new auto-enrolment regime scheduled for 2012 should be broadened to allow auto-
enrolment into ISAs.

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The report stated people would be less likely to opt out of a product they liked, although compulsory
employer contributions under auto-enrolment should initially be restricted to pension funds.

However, it conceded that if auto-enrolling in ISAs proved attractive, the product could be included as
"an alternative" for compulsory employer contributions.

Under the forthcoming pension reforms including auto-enrolment into a pension scheme, employer
contributions will be phased in from 2012 to reach a maximum of 3% of banded earnings to combine
with 4% from the employee and 1% tax relief.

Johnson also outlined four alternative tax-relief structures to harmonise pension and savings, which he
claimed could save the Treasury as much as £8.5bn a year.

However, the report noted: "It is hoped these proposals will attract cross-party consensus. That said, it
is recognised this will not be easy, as many view tax relief, for example, as an instrument of social
policy."

Commenting on the report, Gary Shaughnessy, UK managing director at Fidelity International, said:
"The new government has a lot to consider at the moment, but we sincerely hope they will heed the
advice from industry professionals when it comes to making important decisions that could materially
impact prudent long-term savers in the UK.

"There is not only a growing sentiment the UK savings and pensions systems need to be simplified
and more done to encourage people to save for their futures, but also an emerging consensus on how
this can be achieved." (14/06/2010 IPE.com)

II. Dutch recovery plans need higher pension ages and contributions: OECD
Increasing life expectancy and the recent financial crisis are threatening the solvency of the second-
pillar pension system in the Netherlands, leading to a need for changes to the style of recovery plans,
the OECD has warned.

In its latest economic survey of the Netherlands, the OECD devotes an entire chapter to making the
pension system less vulnerable to financial crises.

It highlighted the recent fall in funding ratios of pension funds from an average of more than 140% to
less than the minimum 105%, marking the second time in 10 years that recovery plans have had to be
widely implemented.

The OECD pointed out these recovery plans mainly rely on suspending indexation of pension rights
and accrued pension rights.

And while recovering equity markets have seen a number of pension funds return their nominal
funding ratios to above the legal minimum of 105%, the OECD argued that in most cases the ratios
were well below the 125% level for indexation or the 145% level that allows funds to make up for the
past suspension of indexation.

Calculations by the OECD suggested that, with the current measures in place, and based on
conservative future return assumptions, funding ratios would continue to improve within the five-year
recovery period so that most funds would reach the legal minimum.

But it warned there would be little improvement beyond this level without a strong rally in equity
markets.

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It calculated that restoring funding rates so that pension funds can honour their pension promises of
up to 80% of average wages would require members to work an extra four years, contribution rates to
be increased by 4.5 percentage points or for future indexation to be paid for by reducing the real value
of accrued rights by one-third.

The OECD said: "To balance intergenerational considerations while minimising potential
macroeconomic costs, the recovery plans should include requiring members to work an additional two
years and introducing a mix of lower indexation and higher contribution rates."

It argued the additional two years of work would align the retirement age with proposed changes to the
state pension system – which would see a pension age of 67.

It also recommended a "structurally more solid solution" for a sustainable pension system and said
that to reduce early retirement incentives would be to link the official retirement age to developments
in life expectancy.

Other issues raised by the OECD survey included the recommendation that regulation be less
sensitive to short-term developments, such as changing the discount rate to either a long-term, high-
grade investment bond, or the long-term government bond rate if these are too volatile.

It suggested the temporary extension of the recovery period from three to five years should become
permanent to allow greater flexibility for pension funds, while pension transfers should be made easier
by allowing self-employed members to stay with their existing scheme.

Corporate governance issues should also be addressed to ensure the risk profile of the investment
portfolio reflects the desired risk strategy and the members' age structure, with members being able to
switch from a persistently under-funded or under-performing fund. (16/06/2010 IPE.com)

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