Commission pay hike comes amid member state austerity plans

BRUSSELS - A European Commission call for a 3.7 percent pay increase looks certain to raise more than a few eyebrows across the union as member state governments struggle to convince domestic civil servants to accept pay freezes.

The proposed rise would apply to all officials in the EU institutions and agencies, as well as to the pensions of retired employees, and comes in the face of national pay protests in countries stretching from Ireland to the Baltics.

Forecasts for rising unemployment and weak economic growth next year are unlikely to improve the situation, with a string of hairshirt budgets expected in EU member states before Christmas.

Brussels watchers warn that the commission decision to push for a 3.7 percent pay rise, despite the financial crisis, has the makings of a public relations disaster, with EU institutions already the target of member state and media ire over excessive pay packages.

"From their point of view it's extremely unwise and will probably be counterproductive," Mats Persson of Open Europe, a eurosceptic think-tank, told EUobserver. "And from our point of view, we think they are paid more than enough already."

Swedish Europe minister Cecilia Malmstrom, also an incoming European commissioner, last week criticised the pay package given to the commission's most senior officials during an interview with Swedish radio, saying it was clearly excessive.

Procedure

Commission pay proposals for EU officials are based on two factors: the cost of living in Brussels and the salary trends in a basket of eight member states, a procedure agreed with governments in 2004.

But data on member state salary trends – provided to the commission by the EU's statistics office, Eurostat – relates to public sector salaries between July 2008 and June 2009.

It does not therefore take into account the current member-state efforts to curb budget deficits, argue commission officials.

"This cuts both ways," says commission spokeswoman for administrative affairs, Valerie Rampi, indicating EU officials will feel the pay squeeze in a year's time.

But EU citizens faced with job losses and pay cuts may struggle to grasp this time delay, while others point out that officials in Eurostat are set to benefit from the requested pay rise, raising questions over a conflict of interest.

Many already perceive EU officials to enjoy high salaries, excessive perks and low tax rates. A junior commission secretary with two children receives €3,130 net pay per month, while a senior director general receives €14,095.

Member-state hypocrisy?

The issue has come to the fore following a meeting of member state experts on Wednesday (25 November) to discuss the commission proposal. Ministers must approve or reject the request by the end of the year.

While a proposal has never been rejected before, a number of governments are thought to oppose the current rise, which will be hard to explain national civil servants facing pay freezes.

Of the fifteen states thought to oppose the pay request, four (Germany, France, Italy and the Netherlands) gave their civil servants salary rises during the reference period in excess of the figure used for the commission calculation.