Cameron to win Eurocrat pay cut as part of EU budget deal

Cameron happy.jpg

British Prime Minister David Cameron is likely to obtain cherished cuts to the EU’s administration budget for 2014-2020 when negotiations resume next year, officials have acknowledged.

A European summit last week failed to agree on the EU's budget for the next seven years (2014-2020) as divergences remained over the extent of cuts to be made to the bloc's finances.

But EU officials confirmed that an offer to cut the bloc's administration budget by around €500 million is likely to be made in the final stages of the negotiation.

EURACTIV has learned that Herman Van Rompuy, the President of the European Council of EU heads of states and government, recognises the need to tackle the perception that EU bureaucrats are sheltered from austerity measures imposed domestically.

The proposal was not forthcoming during last week’s summit because it will only be produced by Van Rompuy as part of a smaller set of "sweeteners" to be introduced in the final stages of EU budget negotiations.

“Had it been offered up front, it would have been pocketed by Cameron and given rise to demands for more cuts as the next negotiations commenced,” according to a European Council source, speaking to EURACTIV on condition of anonymity.

Officials braced for a cut

A senior source at the European Commission also acknowledged that the institutions were braced for a budget reduction, but claimed that this would be lower than the €6 billion Cameron had asked for.

Ahead of last week's summit, Cameron called for:

  • Cutting the overall EU pay bill by 10% for officials, saving €3 billion.
  • Increasing the retirement age to 68 for all EU officials now under the age of 58. The current retirement age is 63. This would save €1.5 billion.
  • Lowering the pension cap from 70% of an official's final salary to 60%, saving €1.5 billion.

"In the UK we are cutting admin budgets by as much as a third, civil service staff by 10% in two years. None of this has been easy," Cameron said after the long-term budget talks were called off last Friday.

"Meanwhile Brussels continues to exist as if it is in a parallel universe. The EU institutions simply have got to adjust to the real world. The commission did not offer a single euro in savings, not one euro – insulting to European taxpayers. I do not think that is good enough,” the British prime minister added.

Cameron made great play of the fact that 16% of Commission employees earn over €123,440 per year, and a Sunday Times article this weekend reported that 3,000 officials earn more than the British Prime Minister. The campaign has resounded with the UK press.

Cameron's campaign against Eurocrats' salaries sparked two strikes earlier this month among 4,000 EU institution staff members. They claimed they had already contributed with savings estimated at around €10 billion as a consequence of the 2004 Reform of the Staff Regulations.

EU net contributors back Cameron

Meanwhile, some member states have warmed to Cameron's agenda. The Netherlands, Sweden, Germany and Denmark are all in favour of a leaner spending plan for the EU, opposing Southern and Eastern European member states.

France, for its part, seems to stand somewhere in the middle. Speaking on Thursday evening (22 November), after the first day of EU budget talks, French President François Hollande said that Paris favours moderate cost reductions in the EU's administration budget.

Europe has much work to do and needs an effective administration, Hollande said. But he added that he would protect Strasbourg's status as the seat of the European Parliament's plenary sessions, alongside Brussels. The monthly MEP's travel bill to Strasbourg is estimated to cost taxpayers around €200 million per year.

Danish Prime Minister Helle Thorning-Schmidt agreed with Cameron that EU staff members would have to endure administrative cuts in the future.

"We have to understand – all of us – that the member states have to cut costs. The state administrations have to save money. It would be weird if only one body, the European Commission, shouldn't be included in that," Thorning-Schmidt told the newspaper Berlingske Tidende.

An EU staff member told EURACTIV during one of the strikes that in the future only people from the Eastern part of Europe would be interested in working for the EU. But the Danish prime minister said that she did not believe that fewer Danes would want to work at the EU institutions.

"I believe, that skillful Danes will continue to find working for the EU attractive," she said.

The European Commission tabled a budget proposal of €1.025 trillion over the next seven-year period (2014-2020).

But austerity-minded national leaders want a much leaner spending plan.

The Republic of Cyprus, in charge of the six months rotating EU Council Presidency, has proposed cutting the European Commission proposal by €50 billion.

A further proposal, tabled by European Council President Herman Van Rompuy, went for nearly €80 billion in cuts.

The potential cuts would have a direct impact on the institutions' staff.

In 2004, around €10 billion of savings were made to staff costs.

  • 13-14 December: EU summit on deepening the Economic and Monetary Union.
  • 7-8 Feb. 2013: EU summit.

EU institutions

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