June 28, 2008
One of the interesting features of the expanded European Union has to be the willingness with which the former Eastern European countries, such as Slovakia, have exchanged the centralised control of the old Soviet Bloc for the centralised control of Brussels. The most recent example is the European Commission’s instruction to Slovakia to change investment rules in Slovakia’s pension system. Pension companies in Slovakia are required to invest 30% of their funds in Slovakia and are not allowed to invest more than 20% in securities issued by other EU countries. Slovakia’s explanation is that such rules encourage investment in Slovakia but the EU has not accepted this and will insist that that the rules are changed because, in its view, such rules inhibit the flow of capital around the EU. It is arguable, of course, that the Slovak pension funds will benefit if they are able to invest more widely but it is equally the case that Slovakia as a whole will benefit if more rather than less funds are invested within its borders. And even if economists considered that the restrictions on investment would benefit neither Slovakia as a whole nor the pension funds, then the question is surely still a local one for Slovakia.Home More Business Stories Search News Story Submissions
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