Regulating the Poor through Internal Borders: The EU in Historical and International Perspectives

Tensions surrounding internal migrants’ access to welfare and the associated politicisations about who should shoulder the ‘fiscal burden’ are not unique to the European Union (EU). Based on a Most Different Systems Design and following an institutionalist approach, this article analyses the developments associated with freedom of movement and access to poor relief/social assistance in four economically and politically diverse jurisdictions. It also considers the implications of these developments for the EU. The four cases analysed are industrialising England, contemporary China, Germany, and the United States. Although economic integration was a necessary, it was not a sufficient condition for the abolishment of residence requirements for internal migrants in all four jurisdictions. Moreover, it took political power, various coalitions, or the leadership of actors to overcome the barriers and hurdles on the path to social citizenship in the wider territorial jurisdictions. Solidarity as a precondition did not play a significant role.

Overview of recent cases before the Court of Justice of the European Union (March 2021-September 2021)

In O.D. and Others v INPS (C-350/20), the Court dealt with the refusal of the Italian authorities to grant childbirth and maternity allowances to third-country nationals falling within the scope of the Single Permit Directive. In CG (C-709/20), the Court considered the refusal of the UK authorities to grant social assistance to an economically inactive EU citizen resident under the UK scheme adopted in the context of Brexit. In AB v Olympiako (C-511/19), the Court found that the Greek legislation, adopted in the context of the economic crisis, placing public sector workers in a labour reserve system is not discriminatory on grounds of age. In WABE and MH Müller Handel (C-804/18 and C-341/19), the Court clarified what circumstances could justify differential treatment indirectly based on religion or belief. The Court confirmed the direct effect of the principle of equal pay for male and female workers enshrined in Article 157 TFEU for cases of work of equal value in Tesco Stores (C-624/19). In Team Power Europe (C-784/19), the Court specified under which criteria a temporary-work agency could be considered as pursuing ‘substantial activities’ in a Member State. In A (C-535/19), the Court held that a Member State cannot exclude an economically inactive EU citizen from its public sickness insurance system but does not have to grant access free of charge. In FORMAT (C-879/19), the Court confirmed that Article 14(2) of Regulation 1408/71 does not apply to a person who, under a single employment contract concluded with a single employer, works in several Member States for more than 12 months in each of those Member States. Finally, in PF (C-27/20), the Court dealt a national legislation which uses the penultimate year preceding the payment period as the reference year for the calculation of family allowances to be allocated.

Different Methods, Different Standards? A Comparison of Two Finnish Reference Budgets

According to Principle 14 of the European Pillar of Social Rights, everyone should have the right to adequate minimum income benefits that ensure a life in dignity. Reference budgets have been proposed to monitor this principle. Reference budgets are priced baskets of goods and services that represent a given living standard. At the moment, no common methodology for constructing reference budgets exists; instead, different methods are used to construct them. This study sought to compare the approaches and results of two Finnish reference budgets: one created by the Centre for Consumer Society Research (CCSR), and the second by the ImPRovE project. The purpose of the article is to respond to a gap in existing literature around how different methods for constructing reference budgets impact their outcomes. The two reference budgets offer a strong basis for comparison because they both sought to capture the same living standard in the same context for similar household types (single woman, single man, heterosexual couple, and heterosexual couple with two children), while using different approaches. The results suggest that the two reference budgets arrive at different estimates of what is needed for social participation. Ultimately, we found that the most significant differences between the budgets were housing and mobility costs for the couple with two children due to differences in information bases, selection criteria, evaluators, and pricing. The study makes a significant contribution to the literature because it is one of the first to explore how different approaches to constructing reference budgets affect their outcomes. The results suggest that clear criteria for constructing reference budgets are needed to monitor Principle 14 of the European Pillar of Social Rights.

Sustainable pensions, democratic governance, and EU law

The quality of democracy in our economy depends on the governance of capital, but Europeans are still deprived of real voice over their retirement money: the single biggest source of capital in the 21st century. This paper outlines three major problems facing EU pensions: precarious retirement, escalating inequality, and mounting climate damage. These problems start with the places where we work, the institutions that control our retirement savings, and the votes on shares that come with them. The central argument is that pensions will only be sustainable once they are democratically, prudently, and loyally governed. First, member states have wide experience with co-determination in capital funds, which can inform the basis of minimum standards in EU law for ‘pension fund democracy’. Second, a growing number of investment rules draw upon Member States’ fiduciary duties and standards for prudence or care; but, these do not yet codify the requirement that beneficiaries’ environmental, social, and governance preferences are followed. Third, votes on shares - bought with pension fund assets - are still being cast by banks and asset managers who manage ‘other people’s money’. This is a serious problem because banks and asset managers have interests that systematically conflict with the ultimate investors: they vote in companies on other people’s money and, at the same time, sell financial products (e.g., pensions) to those companies. The problems are soluble with careful amendments to existing policy that ensure elected representatives of pension beneficiaries are the sole determinants of voting policies, with prudence and no conflicts of interest. A draft EU Directive, based upon emerging best practice, is proposed.

Two different paths to sustainability? A comparison of a Finnish and a Swedish public pension reserve fund

The role played by finance in allocating resources has become crucial in modern economies. Responsible Investing, i.e., the integration of non-financial criteria (such as environmental, social, and governance (ESG), negative/positive screening, and active ownership) into the investment process, has gained an important role. Does this apply to pension funds, too? This article compares two public pension reserve funds, one from Finland and one from Sweden, and describes their path towards responsible investments. The article shows that although having taken different paths, responsible investing has been clearly integrated into the investment process of both funds during the last decades. In Finland, the role played by pension fund insiders has been remarkable. In Sweden, legislators have played an active and significant role in the process. The design of the pension system equally plays an important role in the overall process. In Sweden, cooperation is promoted in responsible investments. In Finland, pension system design fosters competition, thereby reducing cooperation in investments. This article adds more information on the scarce comparative research on public pension reserve funds.

Inadequacies of regulations on supplementary pension plans in Central and Eastern European countries

The supplementary occupational and individual pension systems in Central and Eastern European countries (CEE) are poorly regulated while their architecture is very complex. Law on supplementary pensions focuses on ensuring financial security of financial institutions, their liquidity and solvency, as well as on stimulating the development of additional pension protection understood as higher coverage and assets under management. The efficiency guarantees and cost limits have not been implemented and the profitability of such products for individual savers is rarely assessed. The analyses conducted on the regulation of voluntary old-age pension systems in Bulgaria, Estonia, Latvia, Lithuania, Poland, Slovakia and The Czech Republic indicated the main inadequacies of the supplementary old-age provision offered. They relate to the lack of preliminary and regular product assessment, inadequacy of plan design, efficiency and costliness. The recommended changes relate to risk sharing, forms of pension benefits, limits on costs, information policy and transparency.