Commission warns EU officials’ wages will soar with no deal

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At a time when Britain and a number of other countries are pressing for cuts in salaries of EU officials and civil servants, the lack of an inter-institutional agreement for new rules may actually result in a wage increase, the Commission has warned.

In a letter dated 30 November to the Cypriot presidency and to European Parliament President Martin Schulz, Commission Vice President Maroš Šef?ovi? regrets that the Council has not reacted to the proposal of his services to modify the Staff Regulation for officials and other servants of the EU, adopted in 2004.

Even though the Commission proposal to amend the Staff Regulation has been public for 17 months, EU member states have basically ignored it. Individual countries such as Britain have advocated additional cuts to those proposed by the EU executive. These include increasing the retirement age to 68, or abolishing the European Schools. However, no counter-proposal has been made by member states. For its part, the European Parliament has been constructive and has adopted a report on the proposal, EU sources said.

The main changes in the Commission proposal include a 5% reduction of staff in all EU institutions, between 2013 and 2017, which will be offset by longer working hours, from 37.5 to 40 hours without salary compensation. Also, the Commission has proposed to increase the retirement age from 63 to 65 and cut by -18% and -45% the starting and end-of-career salaries for certain jobs.

EURACTIV has learned that the officials who will be most affected will be those performing secretarial tasks, where salaries range between €2,300 to €11,000, the higher figure being seen as inappropriate even by Commission officials. Sources explained that the EU executive plans to address the problem by making the promotion to higher paid positions much more difficult.

The average salary in EU institutions is €5,000 gross and the average pension is €4,300, EURACTIV was told. The Commission argues that salaries should remain competitive with respect to the other international organisations, the diplomatic services and the banking and consultancy sector. [more]

Overall, the changes proposed by the Commission would amount to a budget reduction of €1 billion for the period 2014-2020 (see background).  

A loss in purchasing power

The Commission also proposes that wages be indexed on the basis of salary fluctuations in the public services of all member states.

Currently, salaries fluctuate following a basket of 8 countries (UK, Germany, France, Italy, Netherlands, Spain, Belgium and Luxembourg). According to the latest salary adjustment, on this basis EU officials will lose 1.1% in purchasing power.

Asked by EURACTIV to compare that figure with a calculation based on the 27 members, spokesperson Anthony Gravili explained that the EU executive didn’t have data on salary fluctuations in the remaining 19 members.

EU civil servants also pay a form of tax, called a “solidarity levy” (in addition to income tax to up to 45%) from 5.5% to 6%. This tax was first introduced in the 1970s during the oil crisis and was maintained over time. In its proposal, the Commission proposes that the “solidarity level” be maintained.

But in the absence of an inter-institutional agreement, EU civil servants would be entitled to receive their salaries without deduction of such a levy, as from January 2013.

In his letter to the Council and the Parliament, Šef?ovi? writes: “The failure of the Council to arrive on time to a position on the Commission proposal and to an agreement with Parliament will result in salaries of EU officials and other agents being increased for that reason.”

However, the Commission realises that such move would not be seen positively from outsiders. Consequently, Šef?ovi? proposes that the present system be kept for one more year, by the means of a limited amendment of the Staff Regulation, consisting of a sole article ensuring the continuation of the method of indexation of salaries and the special levy for another year.

“It goes without saying that the course of action proposed by the Commission would require a swift reaction on the part … of the Council,” the letter ends.

Dagmar Roth-Behrendt, MEP from the Socialists and Democrats group and rapporteur on the revision of the EU civil servants' staff regulation said:

"It is currently very popular to rail against EU civil servants, especially in some European capitals. However, even though my report on the future civil servants' statute has been on the table since April 2012, the members states have deemed it unnecessary to talk to the Parliament about it. This hypocrisy really annoys me."

A European summit two weeks ago 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.

Ahead of the 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.

Cameron made great play of the fact that 16% of Commission employees earn over €123,440 per year, and the British press wrote that 3,000 EU officials earn more than the British Prime Minister. 

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