Member states tell Commission to cut administrative spending. The salaries and benefits of officials working in the EU institutions have come under attack from eight national governments that have written to the European Commission demanding reductions in spending. By Simon Taylor 23.06.2011 / 05:20 CET

Member states take aim at EU pay and pensions

By Simon Taylor
23.06.2011 / 05:20 CET
Member states tell Commission to cut administrative spending.
The salaries and benefits of officials working in the EU institutions have come under attack from eight national governments that have written to the European Commission demanding reductions in spending.

The Commission is next week to publish its proposal for the EU’s spending in the period 2014-20, and the biggest of the national governments have already made it clear that they will not countenance an expansionary budget.

This week, the UK, France, Germany, Austria, Denmark, Finland, Sweden and the Netherlands wrote to the Commission spelling out their demands to reduce administrative spending.

“Very substantial reductions in such spending, including salaries, pensions and benefits, are required over the next multiannual financial framework,” they say.

The eight want to lower officials’ pension rights, end automatic promotion and career progression, and reduce allowances for expatriation.

Staff unions are already mobilising for a struggle, urging Maroš Šefc?ovic?, the European commissioner for administration, to stand firm. A general assembly of union members from all the institutions voted yesterday (22 June) to give notice of strike action.

The Commission has the sole prerogative to propose changes to the staff and financial regulations that govern staff in all the EU institutions. In an email sent to Commission staff last month, Šefc?ovic? promised that changes would be “limited”, but he said that the Commission would put forward a text for initial discussion with the staff unions at the end of June, at the same time that its proposal for future EU spending is published.

The European commissioners will meet for two days next week (29-30 June) to finalise their proposal on the 2014-20 spending. Next week’s meeting will finalise the Commission’s proposal on the size of the overall financial framework, the share of spending among different policy areas and posit new sources of revenue for the budget.

Negotiations on the financial framework are expected to last well into 2012, with the aim of reaching an agreement at least a year before the new multiannual programme comes into force on 1 January 2014.

Five member states, led by the UK, have already called for the next multiannual financial framework to be frozen in real terms. In December, the leaders of France, Germany, the Netherlands and Finland signed a letter drafted by David Cameron, the UK prime minister, saying: “The commitment appropriations over the next multiannual financial framework should not exceed the 2013 level with a growth rate below the rate of inflation.”

Spending on administration takes up only a small share of the total EU budget, but, unlike spending on agriculture and regional policy, is directly under the control of the EU institutions. The Commission is expected to propose limiting the share of the EU’s budget spent on administration to around 6% of the total, close to the 5.8% level during the 2007-13 period.

The eight countries demanding reductions in administrative spending argue that the current pension system for EU officials is “unsustainable” because pension costs are rising and could exceed the costs of active staff.

“Given the high level of EU remunerations and pensions, significant pension reforms are needed to reduce future costs,” their letter says. Allowing officials to take early retirement without losing pension rights should be abolished, they say, and the evolution of officials’ pay and grade should be “more clearly linked to performance, responsibility and management functions”.