The ‘leap’ from coordination to harmonization in social policy: labour mobility and occupational pensions in Europe

Abstract:

The Supplementary Pension Rights Directive, legislated in 2014, represents a leap from minimum co-ordination of social security rights to minimal harmonisation, thereby facilitating the portability of occupational pensions across the EU. The Lisbon Treaty, which relaxed the voting requirements in the Council, accelerated its adoption. In the ‘shadow of the vote’, opponents (mainly continental CMEs) abandoned the defence of the status quo for less exacting legislation.

The majority of Member States instead understood that consensus was necessary to appease the domestic concerns of countries like Germany and to strengthen their negotiating position vis-à-vis the Parliament. Despite the inevitable watering-down, the final law modifies domestic pension arrangements across the EU, thereby benefiting mobile workers. The implications are twofold. First, political economists should take into account the growing European influence on domestic pension policy-making. Second, the extension of QMV to sensitive areas of social policy will probably enhance overall harmonisation.