In November 2011, the European Commission proposed to raise the salaries of around 50,000 EU civil servants by 1.7%. This is absolutely ludicrous particularly at a time of financial crisis where several member states have been applying pay freezes to their civil servants. The EU civil servants already enjoy high salaries, for instances a senior director general may receive over €17,000 per month, plus all the benefits such as family allowances, expatriation allowance, installation allowance, travel expenses, removal expenses, daily subsistence allowance as well as low taxes.
The Commission decides on annual pay adjustments for EU civil servants according to the Staff Regulation formula based on two factors: trends in civil service salaries in eight member states, Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Spain, the UK, and the cost of living in Brussels.
The wages of EU civil servants have been increasing annually whilst there is a wage freeze for civil servants in the UK and other Member States, as the Minister for Europe said to the European Scrutiny Committee this has led to "significant disparity in overall remuneration between EU and Member States' officials".
Several Member States, including the UK, have introduced wage freezes for their national civil servants. Obviously, the majority of the Member States is opposed to such pay rise and is calling for a freeze in the EU civil servants’ salaries. Hence, on 4 November, because of the financial crisis, several member states, including the UK, asked the Commission to invoke a staff regulations’ exception clause which reads “If there is a serious and sudden deterioration in the economic and social situation within the Community, assessed in the light of objective data supplied for this purpose by the Commission, the latter shall submit appropriate proposals (…).” This would have prevented the automatic salary increased for this year. However, according to the Commission the abovementioned criteria have not been met. The Commission said “An analysis based on the 2011 Autumn European Economic Forecast, issued on 10 November, showed those conditions have not been met, and that the -1.8% proposed cut in purchasing power fully captures the changed circumstances of national civil servants.”
According to the UK Government “further increases in remuneration for EU officials are inappropriate” and believes that “the Commission's assessment of the economic situation is incorrect.”
The UK as well as Denmark, France, Germany, Hungary and Italy are leading opposition to the increase proposed by the Commission. Hence, on 19 December, the Council decided not to adopt the European Commission’s proposed 1.7% increase in pay for EU civil servants for 2011. Member states disagree with the Commission and believe that the exception clause could be invoked.
The Council also decided to bring an action before the ECJ because of the Commission's position in relation to the existence of a serious and sudden deterioration in the economic and social situation and its refusal to submit a proposal to apply the exception clause provided in article 10 annex XI of the Staff Regulations. The Council believes that the Commission’s refusal to invoke the exception clause “is based on manifestly insufficient and erroneous grounds”. According to the Council “The Commission's conclusions and its failure to submit such a proposal are therefore in breach of that obligation (…)”
It is important to recall that in December 2009, the Council decided to amend the Commission’s proposal “in light of the financial and economic crisis.” The Member States agreed, therefore, to cut the proposed wage increase of the EU civil servants, from 3.70 percent to 1.85 percent. However, in November 2010, the European Court of Justice ruled that the Council “exceeded the powers conferred on it by the Staff Regulations” by fixing an increase of 1.85% and not a 3.7% as proposed by the European Commission. Member States have opposed to such pay rise due to the economic crisis, and, because the ECJ said so, they had to accept it. Hence, the Member States have no option but to accept salary adjustments proposed by the Commission, which is unacceptable.
Unsurprisingly, today (11 January 2011), the European Commission decided to take the Council to the Court of Justice for failing to adopt the Council Regulation on the annual adjustment to the remuneration and pensions of EU staff as anticipated in the Staff Regulations. The Commission takes the view that the Council by failing to adopt the Commission proposal has breached its legal obligations to respect EU law, particularly the Staff Regulations.
The Commission recalled that in November 2010, the European Court of Justice ruled that “the Council has no margin of discretion allowing it to decide upon a salary adjustment different to that proposed by the Commission on the basis of the criteria laid down in …the Staff Regulations alone.” Moreover, the Commission said “The only possibility to depart from these rules is by using the exception clause which, as the Court stressed, can only be used in very exceptional circumstances where, under the method, the remuneration of officials would not be adjusted quickly enough.”
Hence, the Member States have no option but to agree to salary adjustments proposed by the Commission, which is unacceptable.