Community salaries take the EU Council to the European Court of Justice

Thursday, 14 January 2010

A question of solidarity or legality

Since last November, when the European Commission (EC) made public the salary adjustment of European officials for 2010 , many have expressed indignation at this decision given the financial crisis in the European Union (EU). Despite the legality of the measure, the European Council of Ministers blocked it on moral grounds. In retaliation, the EC brought an action before the European Court of Justice.

What is the salary adjustment and how is it calculated

The General Staff Officer of the European Community document states that employees are entitled to a salary raise taking two factors into consideration: the increased standard of living in Brussels and the wage adjustment of national officials from eight member states (Spain, Italy, Belgium, Luxembourg, France, Germany, Netherlands and United Kingdom) on a yearly basis. Thus, by 2010 the employees of the institutions should have their pay slips increase by 3.7% compared to 2009. In addition, due to their expatriate status (working outside their country), community workers earn between 600 and 1000 euros more than national civil servants.

The calculation method for the increase was adopted in 2004. The eight countries in question were selected precisely to ensure that regardless of where they come from, EU officials will earn at least as much as they earn at home. According to the spokeswoman of the Directorate General for Administration and Anti-Fraud of the EC, Valérie Rampi, selecting Eastern European countries to correct the calculation would entail more variable adjustments (either upward or downward) given the instability of their economies. Rampi, also stated that the salary modification is regular yearly task that could see remuneration rise as well as fall. Until now, however, they have only increased.

According to law, the EU executive prepares the correction (See Figure 1). Subsequently, the permanent representatives (ambassadors) of Member States, meeting in the Committee of Permanent Representatives (COREPER), make a decision indicative of individual governmental interests. The Council of Ministers or Heads of State/Government must then ratify or reject the decision, which enters (or not) into force immediately after.

Austerity measures

As the crisis brings the economies of the twenty-seven member states to the brink of deficit and their citizens experience unprecedented unemployment rates, many governments become reluctant to support a € 34 million increase in European civil servant remuneration. This is why during its December meeting COREPER rejected the pay raise in its entirety. Instead, it opted to reduce the increase from 3.7% to 1.87%.

To express their protest, European trade unions such as "Renewal and Democracy" organised strikes and demonstrations.  Some of their members accuse the national governments they allocate a lot of resources to their own activities but refuse to contribute to EU civil servants.

The EC also threatened from the outset that it would challenge the legality of the measure. This is why following the COREPER statement the institution issued an appeal to the European Court of Justice. In addition to its claim, the Commission requested a 1.85% retroactive annual adjustment since July 2009.

This is not the first time the EC has taken the Council to court regarding the salaries of EU officials. In 1972 the two institutions faced a similar battle. Without a doubt the European civil servants hope the court will again rule in their favour.