Brussels, 4 October 2010
How are adjustments in EU civil servants' salaries/pensions calculated?
The Staff Regulations lay down clear rules on the annual adjustment of remuneration and pensions for EU civil servants, linking them to the evolution of salaries in eight Member States representing 76% of EU GDP. EU civil servants' salaries thus move in line with those of national civil servants in the eight countries concerned (DE, FR, UK, IT, ES, NL, BE, LU). These rules do not give any discretion to the Commission or the Council to apply other criteria.
The method for adjusting remuneration and pensions was an integral part of the whole reform package of 2004, which included creation of the contract agent category with lower salaries; higher retirement age, lower pension rights, higher pension contributions, a special levy increasing every year to 2012 (up to a maximum 5.5%), and lower recruitment salaries. The method for adjustment under the Staff Regulations ensures parallelism between the development of purchasing power of national civil servants and European civil servants and reflects the developments in the cost of living in Brussels (the amount of the adjustment is obtained by multiplying the index representing the variation of the cost of living in Brussels by the specific indicator measuring changes in the purchasing power of national civil servants).
EUROSTAT calculates the adjustment on the basis of statistical data supplied by the eight Member States and the Council has to take a decision before the end of each year.
There is always a one year time lag because the annual adjustment of EU officials' salaries is based on figures provided by Member States that reflect developments during the previous reference year and which determine the adjustment of EU civil service salaries for the following year.
The method has proved its worth over time as a mechanism that is fair to staff and to the European taxpayer by linking the adjustment of salaries in the EU institutions to the purchasing power of national civil servants. It has also prevented the need for contentious annual salary negotiations with the Council.
What is the situation for 2011? 0.4%1 decrease – this is the provisional figure for the adjustment of remuneration of EU civil servants this year; that would result in:
2.8% decrease in the purchasing power of EU civil servants this year (0.4% decrease plus 2.4% increase in cost of living); and
close to 6% decrease of purchasing power of EU civil servants in the period 2004 – 2010 resulting from the application of the method for annual adjustment of remuneration that has been set out in the Staff Regulation since the 2004 reform;
EU civil servants share the pain with national officials when their salaries go down. This illustrates the effectiveness of the Method, which ensures parallelism between the changes in purchasing power of national civil servants and European civil service.
Criticism against the method last year was the result of the time lag in calculating national civil service salaries.
What's happening in the Court case (C-40/10 Commission v Council)?
The Council unanimously decided last year not to follow the Commission proposal which took into account the increases that took place in Member States. Council adopted a 1.85% increase instead of the 3.7% calculated in accordance with the Method as laid down in the Staff Regulations.
The Commission acting as guardian of the Treaty and of EU law and supported by the Parliament, subsequently submitted an action for annulment against the Council Regulation for breaching the Staff Regulations. The case is pending, the hearing is expected to take place on 21 October 2010 and the judgment can be expected in the first half of 2011.
These figures are provisional and have to be still validated by statistical authorities of the MS.