Last November, the European Commission proposed raising the salaries of 44,500 EU civil servants by 3.7%. 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 civil servants’ salaries according to a 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 pay rise was due on 1 January and is based on Eurostat’s data from those member states civil servant salaries between July 2008 and July 2009. Hence, the measures recently introduced by member states to curb budget deficits were not taken into account.
The Council was required to take a decision on the Commission's proposal by 31 December. Obviously, the majority of the Member States are opposed to such pay rise due to the economic crisis. Several Member States have already introduced wage freezes for their national civil servants. The European Commission has been urging member states to cut their budget deficits. In fact, the Commission, since the start of the crisis, has launched excessive deficit procedures against 20 member states.
Member States have invoked a Staff Regulations’ 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 (…).” However, according to the Council legal service there are limited grounds for rejecting the pay rise proposed by the Commission as it is in line with the law.
Nevertheless, on 23 December, the Council adopted, a regulation adjusting, with effect from 1 July 2009, the remuneration and pensions of the EU civil servants. It has 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 from 3.70 percent to 1.85 percent.
In the meantime, the EU civil servants have been on strike asking the member states to “play by the rules” and demanding a 3.7 percent rise.
Unsurprisingly, the Commission has opposed to the Council’s pay offer. According to Euractiv, Catherine Day, the Commission's secretary-general, and Irene Souka, the Commission's director-general for personnel and administration, wrote in a letter to Commission staff that “The Commission considers that this is not an issue of giving staff a higher or lower salary increase; it is a matter of applying a binding method, of respecting Community law and of respecting an agreement with staff representatives in 2004.”
According to the Commission the 3.7% increase is legally-binding. The Commission has pointed out that the present salary increase results from the calculation method, abovementioned, establish in the staff regulation. Hence, the Commission takes the view that the Council by failing to agree the pay rise based on the staff regulation’s calculation method is in breach of its legal obligations to respect EU law.
There was a similar situation in the 70s, during the oil crisis, which ended up with the Commission winning the case at the European Court of Justice. This can happen again as on 6 January, the European Commission decided to bring an action for annulment before the ECJ against the Council decision reducing to 1.85% the salary increase of the EU civil servants, including ECJ judges. The Commission has asked the court to treat the case under the accelerated procedure hence a decision is expected soon. It is not hard to predict that member states will end up having to pay as in the 70s.
