The European Union should abolish the unanimity rule, which gives each European member state the right to veto new laws, says former Belgian Prime Minister Guy Verhofstadt.
"You cannot manage a continent of that magnitude with such a system," he said, speaking at Pensions & Investments' WorldPensionSummit in The Hague, Netherlands,Thursday. "Such a system will always fail and such a system will always act too little too late."
The unanimity rule allows each member state to single-handedly block new legislation and rules proposed for the European Union.
Mr. Verhofstadt also called for pension funds and systems to become a more integrated part of the EU's Stability and Growth Pact, a single-market agreement that helps EU member states maintain stability in the monetary and economic union.
But Mr. Verhofstadt, who is also the president of political party alliance The Alliance of Liberals and Democrats for Europe, said he eventually hopes the EU will replace that pact with a code that would define minimum and maximum values to allow effective labor and pension reforms. "It is much too concentrated on fiscal rules and deficits and not on reforms such as labor or pension reforms."
"It has to be the goal of the European Union to define the sustainability so that the pension system in countries in the European Union (can) become sustainable," he said. "There is not enough pension income," he said, adding that Europe also needs a collective capitalization system.
Mr. Verhofstadt also expressed concerns over the lack of progress in striking a deal regarding the exit of the U.K. from the EU. The only way out is a scenario that could replace the current arrangement, suggesting an association agreement that will allow for the freedom of movement for goods, services and people, he said.