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28th May 2022

'Mushrooming' EU institutions cause unease amid era of national austerity

  • The EU does not need any new institutions, the commission official said (Photo: photogirl7)

There is a growing nervousness at the top of the European Commission at a threat to the very legitimacy of the European Union if the bloc's institutions continue their "mushrooming" while beyond Brussels, public spending is being slashed to the bone.

Speaking to a group of reporters, one very senior commission official let rip about his frustration at the forward march of institutional expansion and how so many European actors appear to be blithely oblivious to the incongruence of their situation amid austerity everywhere else in Europe.

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"Austerity measures at the moment have yet to really set in, but in the autumn, this is going to be tangible, with salary and social benefit reductions, pension cuts. People will begin to feel it," the official said on condition he would not be named. "And people will look at us and say: 'How is it that they are immune, they keep growing when we are having to cut back?'"

"The number one issue should be to stop the mushrooming of the institutions. We don't need new institutions."

"There is a tendency to think every time there is a new problem, the EU can solve it with a new institution."

"We have to launch the new external action service, which involves additional costs; and the parliament wants more money. I was worried that the Van Rompuy taskforce would create a new institution," he continued, referring to the EU Council president's investigation into possibilities for greater "economic governance" of the bloc in the wake of the sovereign debt crisis.

"What was stopped, fortunately, was the creation of a eurozone secretariat, pushed by the French. The idea is still flying about though. Economic governance should be about finance ministers working more closely together, not creating yet another institution."

As it is, the administrative costs of setting up the new European Systemic Risk Board and three new economic supervisory bodies overseeing the banking, insurance and securities sectors amount to €15 million, which was less than some had feared.

The EU's new foreign office and diplomatic corps, the External Action Service, was originally envisaged as being budget neutral.

"But next year, the service would like to have more - new building security, VIP access. This is not wise in the present climate. This is precisely the kind of institution that will keep demanding more money," the official continued.

In 2011, the administrative costs for all EU institutions will climb 4.4 percent, with the total amounting to €8.3 billion out of the bloc's budget.

The admin costs of the commission itself will rise slightly less, on 2.9 percent, with the total costs amounting to €3.7 billion.

The cost rises from other institutions including the European Parliament, the Committee of the Regions, the Economic and Social Committee, the European Court of Justice, the Court of Auditors and the various agencies will come to 4.8 percent, with the total costs amounting to just over €3 billion.

Particularly incongruous at a time when, for example, earlier this year, Romania had attempted to slash pensions across the board by 15 percent before the country's top court struck down the measure as unconstitutional, the cost of EU pensions will rise 6.9 percent next year, with the total cost amounting to €1.275 billion, coming mainly from the cost of people heading into retirement.

Most embarrassing of all, the cost of the European Schools, the nursery, primary and secondary schools providing high-quality free education to the children of EU civil servants, will grow a full 12.5 percent, with the total amounting to €174 million.

In proportion to the administrative costs of member states, he stressed, these figures are actually not that high, but the divergent fiscal paths of the EU institutions and the member states has not gone without notice in some national capitals.

In early July, the European Central Bank, the ne plus ultra of fiscal austerity taskmasters, warned Bucharest in a letter against the government's plans to slash the pay of employees of the country's central bank by 25 percent, making the bankers appear to be looking after their own while leaving it for everyone else to tighten their belts.

"The political class of Europe is getting really frustrated with the EU institutions. They should show some restraint, they say. They are growing at a time of national austerity. And they are right."

Inside the commission, people are slowly coming around to this view as well, "because there is a growing recognition that the credibility, the legitimacy of the institutions is at stake."

"We should liquidate some institutions, otherwise we could in late 2011 be forced to do so," he said, predicting then as the date by which austerity will truly be biting.

"We need to show some measure of restraint at least, a gesture, such as doing away with the parliament's Strasbourg seat," he said.

The French city of Strasbourg is the official seat of the European Parliament and its secretariat is in Luxembourg, but most work is done in the parliament's buildings in Brussels and the cost of the "travelling circus" shuttling between the three cities in 2011 will come to an estimated €240 million over what would be spent for a single location. France however has consistently called the move to a single seat "non-negotiable."

"We should also shut down the Economic and Social Committee and Committee of the Regions," he added, referring to the two institutions that represent the interests of EU subnational regions and employers and workers. Both have only consultative rights in the EU legislative process.

In German, such institutions are referred to as 'Tintenburgen', or 'Ink Castles', producing a mountain of reports that few people pay any attention to.

"These institutions were born when the parliament had no power, was not a factor. Now this is a duplication. There is no real need for these bodies."

"Europe needs a bit of masochism," he joked.

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