The European Commission has decided to formally request Slovakia to remove its investment restrictions on statutory pension funds, which in the Commission’s view constitute an infringement of Article 56 Treaty EC prohibiting restrictions on free movement of capital. This formal request takes the form of a “reasoned opinion”, the second stage of the infringement procedure laid down in Article 226 of the EC Treaty. If there is no satisfactory reply within two months, the Commission may refer the matter to the European Court of Justice.
In the Commission’s view, Article 82 of the Act no. 43/2004 (as amended) on retirement pension savings constitutes a restriction on free movement of capital between Member States, as it establishes a quantitative limit on investments. By virtue of this provision, fund managers cannot invest 30% of their assets in other Member States. Moreover, fund managers are hindered from investing more than 20% in securities issued or guaranteed by another Member State, while this limit would not apply with regard to securities issued or guaranteed by the Slovak Republic. These conditions are hindering capital movements between Member States as they render investment abroad impossible or less attractive than domestic investment.
The explanation provided by the Slovak authorities, that those restrictions take into account society’s interest in the creation of an economic and financial stimulus which would promote the development of the Slovak capital market, is not legitimate in the Commission’s opinion. The aim of promoting the development of the domestic capital market does not constitute an overriding requirement of general interest, in the meaning of Article 58 (1) EC, that would justify restrictions on investments. It is settled case-law that economic grounds can never serve as justification for obstacles prohibited by the Treaty.