Opinion of the Economic and Social Committee on "Options for the reform of pension schemes"
Date: 2002-05-29
Institutions: European Economic and Social Committee
Subjects: employment policy, pension scheme, social change, social policy, social security, working life

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Opinion of the Economic and Social Committee on ‘Options for the reform of pension schemes’

(2002/C 221/14)

In a letter sent by the Commission President, Mr Prodi, on 10 January 2002, the Commission asked the
Economic and Social Committee, under Article 262 of the Treaty establishing the European Community,
to draw up an opinion on ‘Options for the reform of pension schemes’.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the
Committee’s work on the subject, adopted its opinion on 13 May 2002. The rapporteur was Mrs Cassina
and the co-rapporteur was Mr Byrne.

At its 391st plenary session (meeting of 29 May 2002), the Economic and Social Committee adopted the
following opinion by 102 votes to two with one abstention.

1.

Introduction

1.5.
The Barcelona Summit stressed the importance of
active aging and the need for measures which provide incen-
tives for a voluntary raising of the real retirement age.

1.1.
At its plenary session on 29 November 2001, the EESC
adopted two opinions on pensions (1), which were intended as
an overall contribution to the discussion of the subject at the
Laeken European Council. The present opinion makes a
number of references to these earlier opinions, without quoting
them at length.

The Laeken European Council took note of the joint
1.2.
report on pensions by the Social Protection Committee (SPC)
and the Economic Policy Committee (EPC) and decided to
launch the open method of coordination in the pensions field.
It also stressed that the ‘adequacy of pensions, the sustainability
and modernisation of pension systems and the improvement
of access to occupational pension schemes are all of particular
importance for dealing with the increasing needs (2)’.

1.3.
On 24 January 2002 the Commission published the
report, drawn up at the request of the Stockholm European
Council, on Increasing labour force participation and promot-
ing active aging (3).

The Commission President, Romano Prodi, wrote to
1.4.
the EESC President, Göke Frerichs, on 10 January 2002 asking
the EESC to investigate the possible options for pension
schemes and assess them in terms of the sustainability of social
protection, public finances and growth.

( 1) On Economic growth, taxation and sustainability of pension
rights in the EU (OJ C 48, 21.2.2002 ) and on the Communication
from the Commission to the Council, the European Parliament
and the Economic and Social Committee: Supporting national
strategies for safe and sustainable pensions through an integrated
approach (OJ C 48, 21.2.2002).
( 2) Presidency conclusions, point 30.
( 3) COM(2002) 9 final of 24 January 2002.

1.6. While reaffirming the views expressed in the aforemen-
tioned opinions and in others directly or indirectly addressing
the problem of pension schemes, the EESC intends here to
examine some of these issues in greater detail. It will focus on
four aspects: social sustainability of pension schemes in
relation to the new needs of the changing labour situation;
measures to help prolong active life; measures to improve
financial sustainability; and suggestions to accompany the
launch stage of the ‘open method’ in this field.

1.7.
First and foremost, the EESC reiterates its deep convic-
tion that any adaptation, modernisation or reform of pension
schemes must be carried out with the active, aware and
informed involvement of the social players, since that is the
only way to create the conditions for a substantial consensus
on the necessary choices to be made at national level.

2. Social sustainability in relation to the new needs of

the changing labour situation

2.1.
The EESC has often drawn attention to the need to
ensure that pension schemes are sustainable in terms of both
social cohesion objectives and the stability of public budgets.
Both these objectives must be pursued resolutely by striving at
national level to strike a balance between economic, fiscal,
employment and welfare policies. This in turn should help to
establish a satisfactory distribution between the various pen-
sion schemes (first, second and third tiers) that will make them
more dynamic while also safeguarding their role in pursuing
certain basic social objectives. It is only on the basis of full

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respect for this subsidiarity — guaranteed by the involvement
of the social partners and the national institutional players —
that the EESC is putting forward its thoughts on this matter, in
the hope that this will spark an open and realistic debate
between all the relevant stakeholders.

2.2.
The requirement for national pension schemes to be
able to meet workers’ legitimate aspirations to spend the last
stage of
their lives in security and dignity is confirmed
by virtually all the relevant Community documents. This
affirmation must never be regarded as a generic principle, but
as a basic objective to be pursued by adapting the various
national schemes, and implementing the reforms needed now
and in the future for demographic, social and budgetary
reasons.

2.3.
The EESC stresses that a proper response to the need
for social sustainability must simultaneously take account of
the structure of the labour market, the characteristics of work
and likely future developments. Now more than ever, with the
constant innovations in types of contract, it is essential to
understand how the picture is likely to change in the medium
term. The Lisbon strategy has shown the need to relaunch the
European model of socio-economic development, involving
the aim of full employment with a high skills content, in a
context of greater participation in the labour market. The EESC
reaffirms the need to pursue these objectives with maximum
determination, as only resolute progress towards a higher level
of better-quality employment can stabilise the fiscal resources
needed to guarantee the function of solidarity performed by
social protection schemes — a function which cannot be
neglected without condemning our society to endemic prob-
lems of poverty and marginalisation. The Lisbon strategy, in
contrast, seeks to combat these with a strong commitment
and overcome them in the medium term.

Employment trends in the Member States show that
2.4.
job creation continues to be insufficient because of weak
economic growth, the effects of the slowdown in the global
economy, particularly since 11 September 2001, and a certain
wait-and-see attitude on the part of investors. In view of the
link between employment and pension policies, the Committee
takes the view that the Union should adopt new development
objectives and growth policies which would stimulate the
economy and create a favourable context for solving the
employment problem. As pointed out in earlier opinions, the
scope for manoeuvre in public budgets is limited by the need
to comply fully with the Stability Pact, which is designed to
ensure proper management of economic and monetary union.
This means that the reduced intervention potential of public
funds must be carefully distributed so that social spending
focuses on the development of active policies for the labour
market and social protection.

2.5.
Despite the growth difficulties mentioned above, nearly
all the Member States have seen an upturn in employment
involving in particular posts created through new types
of contract
(especially fixed-term, part-time or temporary
contracts and forms of subcontracted work). These types of
contract are relatively common in the 15-25 age group,
especially among skilled workers aged between 20 and 25,
and one would be justified in saying that a significant
percentage of these jobs are transformed later into full-time,
indefinite-period contracts. The EESC therefore welcomes the
creation of new jobs and the development of new or different
types of contract, but shares the concern of the Commission
and the Barcelona Summit with regard to the quality of the
work and the balance between flexibility and security of
employment.

2.5.1.
These new types of contract will continue to develop
and create jobs, raising the question of how they will affect the
social and financial sustainability of pension schemes, whether
PAYG or funded. The contribution cover from workers with
new-type contracts does not usually produce a continuous,
regular flow of revenue. This affects the resources of the
pension schemes and makes it more difficult for the workers
in question to plan adequately and responsibly for their lives,
careers and old age.

2.5.2.
In particular, the problem arises of pension contri-
bution cover in periods of inactivity or training between one
contract and another. Without leaning towards one or other
of the various solutions currently under discussion, the EESC
stresses that any solution must meet the twofold need for
security and flexibility. In putting forward its thoughts here,
the EESC considers that all the options must be debated in a
transparent and unprejudiced manner. The solutions must
involve national choices that take balanced account both of
the needs of all the parties involved and of the challenges
facing pension systems.

2.5.2.1.
The most obvious solution would appear to be for
the state to take over cover for involuntary periods of
inactivity. However, this would not solve the problem because
it would increase the burdens on the public purse and it seems
unlikely that these would be sufficiently offset by the extension
of the tax base (direct and indirect taxation) fostered by the
new types of contract.

Similarly,

strengthening and broadening sup-
2.5.2.2.
plementary and private schemes might improve the balance
between public and private schemes but it only shifts the
problem without solving it for the worker. Indeed, a tempor-
arily unemployed person, who does not generate revenue, will
have one more problem if he/she also has to contribute to
second-tier and third-tier schemes, always assuming that he/
she is able and willing to join one, since as pointed out in

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the aforementioned opinion (1) there are certain rigidities in
schemes of this kind, which are not always favourable to
workers with new-type contracts.

The deployment of special reserve funds — which
2.5.2.3.
the EESC has already supported in an earlier opinion (1) — is
one useful option, but some Member States find it difficult to
free up budgetary resources, raise taxation to supply the fund,
or find new sources for state budgets.

extent, they agreed with the statement that ‘the current level of
pensions should be retained, even if this means increasing
taxes or contributions’. It is significant that over 77 % of those
questioned agreed either ‘strongly’ or ‘broadly’. This does not
lead to any conclusion on the merits of this type of measure,
but it does bring out the fact that the European public is aware
of
the problems and is ready to take a direct share of
responsibility for solving them. The EESC hopes that this spirit
is shared by all the social players, and above all — as already
repeatedly stated — that the workers and citizens of the
Member States will be seriously and responsibly involved in
policy choices of this type.

2.5.2.4.
The EESC is concerned to note that according to
the Commission communication on Increasing labour force
participation and promoting active aging, workers on fixed-
term and part-time contracts have rather high drop-out rates
(15 % into unemployment and 10 % into inactivity). The EESC
takes the view that these data should not lead one to make
hasty judgments on the types of contract concerned, but rather
to take account of the need to step up measures to reduce
periods of unemployment and inactivity by judiciously com-
bining active management of the labour market, training and
efficient employment advice and guidance services. If proper
training is provided for the relevant types of work, worker
motivation will improve.

The EESC reiterates its concern about the position
2.5.2.7.
of workers who, for various reasons (including those arising
from the growing trend towards new forms of contract), do
not earn sufficient pension rights under present schemes
following breaks in their working lives and the ensuing break
the EESC
in contributions. Without suggesting solutions,
hopes a careful assessment will be made at national level; it
points out in particular the conditions laid down by Swedish
and Irish pensions law in order to deal with this state of affairs,
and urges the Member States to give priority to resolving the
issue (2).

2.5.2.5.
The EESC notes that some envisage a slight increase
in employers’ contributions for fixed-term, part-time and
temporary contracts, suggesting a sort of trade-off between the
flexibility gains this type of contract produces for businesses,
and the small sacrifice made in terms of a greater contribution
to general welfare. This possibility is strongly opposed by
others, who believe it would amount to discrimination between
different types of contract, and would only serve to discourage
the use of the new forms of contract.

2.5.2.6.
Another idea current in the debate is that of a
general increase in contributions (from both employers and
employees) with a view to maintaining and/or boosting the
intervention potential of social and pension expenditure,
including in the future. This idea must also be discussed, but
the EESC is concerned about a possible tendency to raise
contribution levels, which are already quite high in almost all
the Member States, and takes the view that any proposal to
increase them should be assessed in terms of its probable
impact on employment. The EESC notes, in passing (and to
draw attention to an important methodological aspect of the
problem), the results of a recent Eurobarometer survey: a
sample of European citizens was asked whether, and to what

The EESC considers

2.5.3.
that choices between the
measures mooted in the preceding points and any other
proposed measures could be defined through national pro-
visions following detailed and open discussion with the social
partners.

In any event, all

types of employment contract
2.5.4.
should include full and transparent provisions on pension
contributions and should contain clear information on the
various opportunities, so as to enable workers to plan their
working life and their pension responsibly.

Nonetheless, there is also a need for a European
2.5.5.
framework setting out certain guarantees regarding proper
management of second-tier pension funds, and regarding the
transferability of contributions between the various pension
funds, thereby encouraging confidence and mobility among

( 1) Opinion on Economic growth, taxation and sustainability of

pension rights in the EU (OJ C 48, 21.2.2002).

(2) Under the Swedish scheme, unemployment, sickness and study
allowances all confer pension entitlement. The relevant com-
ponent of the state study grant corresponds to approximately
20 % of average earnings. As regards first-tier pension rights, the
Irish scheme traditionally combined actual contributions with
those credited to beneficiaries as a result of their compulsory
social security contributions.

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workers (1). This need is all the clearer after certain deplorable
events that wiped out many years’ pension contributions made
by employees of firms which had mismanaged second-tier
resources by developing irresponsible financial strategies.
Although these are only isolated cases, the public alarm which
they generate does not encourage workers to contribute to this
type of pension scheme, nor to engage in new types of
contract.

3. Measures to help prolong active life

3.1.
The EESC has already devoted much attention to this
subject in earlier opinions (2), maintaining among other things
that raising the official pensionable age must correspond to
the rise in life expectancy, but can never be the only response
to the problems raised by the increase in levels of dependency
and to the difficulties of public budgets. Nor is it enough to
offer tax or other financial incentives to encourage the worker
to go on working (3). Anyone who has spent a lifetime in a job
which is exhausting, often relatively unskilled, and provides
little job satisfaction, can rightly expect to receive a pension in
line with the possibilities offered by national provisions; other
workers, too, might prefer to give up a working life for a
variety of reasons. In this connection, the EESC also wishes to
stress the importance of getting to grips with the increasing
rate of exclusion on grounds of ill health. The voluntary
principle must always be upheld and safeguarded, subject to
the development of adequate incentives. The EESC approves
the Barcelona European Council’s recommendation to raise
the average effective pensionable age by five years by 2010.
The reason why the EESC supports this objective is that the
impact on the financial sustainability of public pension
schemes could be very positive: a study by the ECFIN DG
shows that prolonging working life by one year would lead to
savings equivalent to 0,84 % of GDP. The objective set at
Barcelona of raising the effective pensionable age could be
achieved by combining measures to discourage the current
trend towards early retirement with measures to encourage
workers who reach the legal retirement age to remain at work
on a voluntary basis (although not necessarily in the same post
or with the same function).

( 1) Opinion on Economic growth, taxation and sustainability of

pension rights in the EU (OJ C 48, 21.2.2002).

( 2) Opinions on:

‘Communication from the Commission to the
Council, the European Parliament and the Economic and Social
Committee: Supporting national strategies for safe and sustainable
pensions through an integrated approach’ (OJ C 48, 21.2.2002);
‘Economic growth, taxation and sustainability of pension rights
in the EU’ (OJ C 48, 21.2.2002); and ‘Older workers’ (OJ C 14,
16.1.2001).

( 3) See especially the Commission Communication on ‘Increasing
aging’

force participation and promoting

active

labour
— COM(2002) 9 final.

The EESC does not wish to criticise national provisions
3.2.
which,
in some Member States, allow workers to cease
employment before they reach pensionable age. It would,
however, suggest that the Member States make an overall
assessment of end-of-career schemes — of which early retire-
ment is one aspect — taking account in particular of the
negative impact which they can have on state budgets, of
possible alternatives to early retirement schemes (4), of the
impact on labour relations, of the relationship with legislation
on pensionable age and of the motives of workers. In this
context, the EESC feels that, except in the case of exhausting
jobs, early retirement practices should, in time, be brought to
an end and in the meantime should be limited to cases of
absolute necessity where there are no feasible alternatives. The
EESC stresses in particular the need to make every effort,
where there is an excess of manpower, to find adequate
alternatives to early retirement, such as mobility towards other
companies or sectors, retraining to meet new production
requirements, or outsourcing, the latter being an extremely
attractive and creative practice that is still not widespread
enough.

3.2.1.
The EESC also stresses the need to increase partici-
pation in the labour market by older workers, and in particular
to take all necessary measures to encourage their re-employ-
ment after they have become unemployed, by making them
more employable (training measures, recognition of skills,
experience and capabilities whether certificated or not, guid-
ance etc.).

In its recent Communication on ‘Increasing labour
3.3.
force participation and promoting active ageing’, the Com-
mission analyses in detail the importance of the reasons
which can lead workers to remain active. In particular, the
prolongation of employment should be combined with specific
training measures and with a clear flexibility in working hours,
as is being explicitly requested by many older workers.
Moreover, it is likely that, given the rise in life expectancy, a
worker may prefer to remain at work for social reasons and
for personal development rather than for purely economic
reasons. The EESC therefore takes the view that working
conditions and the position occupied in the firm should also
be covered by ad hoc measures, planned around the needs and
potential of the workers concerned and accompanied by
new measures for involvement and participation (in profits,
decision-making, collateral activities etc.). Workers who still
feel useful to their employer and colleagues, and who feel that
they still have skills and potential to offer, will be happy to
remain at work and when they actually do retire will retain an

(4) It is well known that early retirements have had, and still have, a
considerable impact on the budgets of public pension schemes,
above all because, in the years when the prospect of completing
the internal market encouraged businesses to restructure, more
jobs were abolished than were created by market expectations,
and between 15 and 20 million early retirements took place in
the EU during that period.

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active and responsible outlook as a pensioner. Of course, the
goal of promoting active ageing means that human resource
management and development strategies will have to be
expanded and better targeted, with greater involvement of
workers right from the start of their careers.

3.4.
Since measures to promote active ageing must meet
the needs of all players in the firm, it is difficult to conceive of
their being regulated in detail by national laws. However, if the
firm is adequately supported by a balanced national regulatory
and fiscal framework, the finer detail of the measures to be
taken could be settled in negotiations between the parties at
sectoral, regional or company level.

3.5.
The EESC imagines that, in the context of the European
social dialogue and of corporate social responsibility, there is
scope for negotiated strategies to be sought which help
to prolong active life. These strategies could be applied
autonomously by the parties at national level, thus providing
significant additional material for the benchmarking of best
practice to be verified using the open method of coordination.

4. Measures to improve financial sustainability

4.1.
The financial sustainability of pension schemes is a
vital objective for ensuring social sustainability and must
therefore be pursued in a balanced way, through an appropriate
mix of policies and measures. The EESC is fully aware of the
importance of this challenge and in no way underestimates the
impact of the negative demographic trend in the Member
States and candidate countries, which is increasing the depen-
dency rate. Europe is an ageing continent (1), and the costs
of this could impact seriously on future generations. The
cumulative effect of expenditure on pensions and health
poses serious potential problems for state budgets, because
demographic trends are not reversed in the space of a few
decades. However, the EESC feels that it is pointless, and in
some cases actually damaging, for the media and some political
and government circles to respond to the publication of
economic and demographic studies with alarmist stances that
focus solely on the risk of instability which an uncontrolled
development of public pensions would represent for state

budgets. But the EESC also criticises the reassuring attitude of
denying,
in the face of all the evidence, that the financial
sustainability of pension schemes is a challenge to be taken
very seriously. Incidentally, the EESC points out its earlier
views (2) on the already obvious (although not in itself decisive)
contribution of migrant workers to the financial sustainability
of pension schemes, provided that such workers are taken on
under proper conditions and enjoy equality of treatment with
workers who are Member State nationals. The EESC therefore
reaffirms the need for more resolute steps towards a fair, far-
sighted Community immigration policy, and would point out
in the last two years, one out of every four new
that
contributors to the Spanish social security system has been an
immigrant from a third country.

4.1.1.
The practice of tax evasion, not generalised but
unfortunately quite frequent, is damaging to workers (lack of
cover), honest entrepreneurs (unfair competition) and state
budgets (lost tax revenue). The EESC takes the view that the
Member States should take much more determined action to
overcome this problem as soon as possible.

4.2.
The EESC thinks that these issues must be addressed in
a carefully balanced manner, so as not to arouse mistrust and
fears among the public or issue soothing messages. The EU’s
citizens are mature adults who realise the difficulties of the
situation but who must be involved in the debate on major
issues and helped in their legitimate desire to secure prospects
for their old age. Here it is worth noting that the abovemen-
tioned Eurobarometer survey showed that the vast majority of
people in all the Member States view the situation realistically
and with a sense of responsibility, and have a lucid and
balanced picture of their future pensioner status.

4.3.
The problems must always be viewed from a dynamic
standpoint. The EESC points out that many Member States
have already introduced, or are preparing, reforms designed to
improve the financial sustainability of their pension systems;
analyses which do not take account of the gradual impact of
these reforms over time could therefore lead to (possibly
serious) errors in the forecasts.

4.3.1.
In nearly all the Member States which have already
carried out pension reforms, eligibility conditions have been
tightened up, and in some cases the amounts paid have been
reduced. These operations must display the requisite financial
rigour, but must never fall short of the solidarity objective of
public pension schemes. Nor should they be subject to constant
unforeseen adaptations, without adequate trial periods. The

( 1) Information report on the Demographic situation in the EU and

future prospects — CES 930/1999 fin.

(2) Information report on the ‘Demographic situation in the EU and
future prospects’ — CES 930/1999 fin; and Opinion on the
Communication from the Commission: A concerted strategy for
modernising social protection — OJ C 117, 26.4.2000.

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EESC reaffirms the need to encourage workers to share the
responsibility for planning their careers and their pension
expectations, but this can never be achieved by continuing to
modify benefits (downwards) or by unilaterally imposing
stricter conditions for the right to draw a pension.

4.3.2.
Some of these reforms are already yielding results
and have shown that the risk of negative effects on public
finances can be significantly reduced. The reform of the
Italian pension system in 1997, although leaving room for
improvements, already suggests that Italy will be one of the
European countries least affected by changes in expenditure
(only 1,7 % between 2000 and 2050). The Commission
projections — and those of some private research bodies —
expect
that Sweden too will have an extremely modest
spending ‘peak’. Both Sweden and the Netherlands are interest-
ing examples of how the balance between the different schemes
is also beneficial for the sustainability of the public schemes
and is better able to contain spending in absolute terms. The
problem of the ‘expenditure peak’ should not be overestimated,
but has to be examined from several standpoints and in
conjunction with the problem of the level of pension spending
in relation to social spending in general and the GDP: according
to the Commission projections, the Member States could face
an increase in average pension expenditure corresponding to
3-4 % of GDP, but in some States this figure could reach 6 %
or 7 %, which are clearly significant and worrying percentages.
The EESC stresses, however, that this ‘peak’ has a different
meaning from one country to another; it should be carefully
assessed in relation to specific national conditions. For exam-
ple, in a country for which a significant ‘peak’ is foreseen, it
would be necessary to consider the health of the public
finances, the potential for growth of the tax base, the soundness
and proactive nature of the social protection policy, pensioners’
quality of life in comparison with that of workers, the general
level of development, the capacity to iron out social and
regional inequalities, and the likely duration of the ‘peak’. In
this context, the capacity for recovering from the ‘peak’ and
the time taken to do so appear to be as important as its
magnitude (1).

4.3.3.
The EESC reiterates its firm conviction that the most
advanced, balanced and acceptable reforms are those which
arise from joint planning involving the social partners and
governments (see the recent EESC opinion on ‘Supporting
national strategies for safe and sustainable pensions through
an integrated approach’ (2).

4.3.4.
Careful analysis of the documentation now available
reveals interesting data which can suggest innovatory, flexible
and effective solutions. A study by the ECFIN DG (3),
for
example, shows that a gradual increase of 5 % in the labour
market participation rate could lead to savings amounting to
0,5 % of GDP, and that prolonging working life by a year
would entail a saving of 0,84 % of GDP. As stated in point 3.1
above, measures to prolong working life must safeguard the
voluntary element, but if a significant percentage of workers
could be sufficiently motivated to remain active, perhaps even
for two or three years after reaching pensionable age, the
benefits could accumulate.

5. Suggestions for launching the ‘open method’ in this

field

5.1.
The ideas set out in the points above, which could
supplement political options on pension reforms, nearly all
relate (4) to initiatives to be taken at national level, the efficiency
of which would be increased by comparison and examination
using the ‘open method’. The EESC would emphasise the
potential of this method for finding innovatory solutions, for
refining the capacity for analysis and comparison among the
Member States, and for ensuring the joint endeavour to achieve
the social and financial sustainability of pension schemes.
Moreover, the EESC reaffirms the need for substantial, continu-
ous involvement of the social partners (especially at national
level) on the one hand and of the applicant countries on the
other, as stated in the aforementioned opinions.

In this context, it is essential to develop forecasting
5.2.
indicators which take progressive account of the reforms being
made, and which can be used to gauge whether pension
schemes effectively correspond to social needs, the gender
trends in the labour market and the macro-
dimension,
economic and budgetary conditions of the Member States.
Alongside the data and analyses in national reports, this could
provide a framework of indicators accepted by the Member
States as a way of regularly verifying not only the effects on
the budget but also the resulting social developments.

As to the subjects for debate, the EESC suggests that
5.3.
priority be given to the question of incentives and reasons for
prolonging working life, and to the development of accurate
benchmarking of best practice in this field.

( 1) On this subject, see the criteria adopted in the Merrill Lynch study

policy options, Chapter 5.

to assess the sustainability of pension reforms in Europe.

( 2) OJ C 48, 21.2.2002.

(4) The exception is the Community framework to facilitate the
transferability of second- and third-tier pensions (see point 2.5.5).

(3) Reforms of the pension systems in the EU: an analysis of the

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5.4.
Finally, the EESC points out the need to involve the
applicant countries as soon as possible in developing the open
method of coordination on pensions, emphasising that the
considerable diversity in the systems of the future member
countries, as well as the diversity in macroeconomic and

income conditions, will pose new problems, but will also offer
significant opportunities for those countries to cooperate and
integrate with the European model of economic and social
development.

Brussels, 29 May 2002.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Directive to
improve access to justice in cross-border disputes by establishing minimum common rules
relating to legal aid and other financial aspects of civil proceedings’

(COM(2002) 13 final — 2002/0020 (CNS))

(2002/C 221/15)

On 6 February 2002, the Council decided to consult the Economic and Social Committee, under
Article 262 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the
Committee’s work on the subject, adopted its opinion on 13 May 2002 (rapporteur working without a
study group: Mr Cavaleiro Branda˜o).

At its 391st plenary session (meeting of 29 May 2002), the Economic and Social Committee adopted the
following opinion by 109 votes in favour and one vote against, with no abstentions.

1. Objectives of the proposal

in the field of judicial cooperation in civil matters to eliminate
to the good functioning of civil proceedings
obstacles
[Article 65(c)].

1.1.
On 18 January 2002, following the Green Paper on
legal aid in civil matters (1) (February 2000) and a hearing with
national experts and professional circles concerned (February
2001), the European Commission adopted a draft directive
aimed at setting up a European system of free legal aid in
cross-border civil disputes and thereby increasing the resources
available to citizens to ensure their rights of access to justice.

1.2.
As the legal basis for its initiative, the Commission
cites Article 61(c) of the Treaty, which commits to the objective
of progressively establishing an area of freedom, security and
justice and provides for adoption by the Council of measures

( 1) Cf. Green Paper on Legal Aid, COM(2000) 51 final.

1.3.
According to the proposal, anyone involved in a civil
dispute, acting as claimant or defendant, who does not have
sufficient resources, may benefit from the services of a lawyer
and be represented by him/her in court at no charge. The legal
aid also covers the pre-litigation stage and extra-judicial
procedures. The Member State of the forum provides the aid,
including the costs resulting from the cross-border nature of
translation and travel
interpreting,
the dispute, such as
expenses. The Member State of residence of the claimant will
bear the costs of a local lawyer, particularly in the pre-litigation
phase. Reasons must be given for any rejection of a request for
legal aid. The system will be managed by a network of bodies
chosen by each Member State and empowered to send and
receive aid applications. The Commission will also establish a
standard form for the transmission of aid applications.