Thursday

23rd Nov 2017

Paymasters seek cuts to EU officials' pensions

  • Even if the pensions cuts go through, they will save little in the coming years (Photo: European Commission)

The eight countries which make a net contribution to the EU budget want to cut EU officials' pensions.

The group - Austria, Denmark, Finland, France, Germany, the Netherlands, Sweden and the UK - put forward its ideas in an internal letter sent to the European Commission on 17 September.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

For any EU staff reading the text, the scariest bits come on page three.

The paper - seen by EUobserver - says EU own contributions to the pension fund should go up from 33 percent to as much as 50 percent.

It also advocates an "average wage-based system for the calculation of pensions."

Under current rules, the pension is based on what you are being paid when you retire. But the new system would see people who start on a low grade and work their way up get a pension based on their average income over the years.

The letter paid homage to the economic crisis.

The group-of-eight said it is "very concerned" EU spending on staff and buildings will go up by €15 billion in 2014-2020 compared to 2007-2013 and that annual EU pension costs will double by 2045.

It noted that: "Most MS [member states] are responding to current economic and fiscal circumstances with efficiency measures or other reforms affecting the terms and conditions of their national civil servants. The staff of the European institutions should share the burden."

The increase in EU pension costs comes from the Brussels' bubble own demographic bubble.

Pension costs were negligible for decades because it took time for the first few generations of EU officials who began work in the 1950s and 1960s to age.

But the number of staff hitting retirement is now at a high, while the level of new intakes to help pay for them is falling.

For its part, the commission on Tuesday (16 October) said it will not fight over the next budget until all 27 countries come up with a joint position - a development expected at the November summit.

But its spokespeople noted that existing commission proposals call for a 5 percent staff cull and a freeze on non-pension-related spending in years to come.

Some EU trade unions are planning to go on strike on 8 November if member states opt go further.

Meanwhile, there is comfort in the fact the September letter makes no mention of retroactive effect.

A legal opinion drafted on 25 April by the EU Council's internal legal service - also seen by EUobserver - shows the eight countries know all too well that if they try to back-date the measures, the move would be thrown out by the EU court in Luxembourg.

"The principle of acquired rights is a general principle of Union law ... Where legal provisions have already given rise to rights or benefits, their retroactive withdrawal would be contrary to such general principle of law," it says.

"Thus the factors determining the pension rights of officials who retire before new measures enter into force cannot be modified. The same applies to officials who have not yet retired by that date," it adds.

If the lower pensions only hit staff hired after the reform, it will have next to no impact on the EU budget for a long, long time.

Opinion

Public sector workers are being forced to pay for the crisis

With the austerity measures the focus has completely shifted from addressing the causes of the crisis to making public service workers pay for a crisis they did not cause, nor contributed to, writes Jean Willem Goudriaan, Deputy General Secretary of the European Federation of Public Service Unions.

MEPs back cost-cutting on EU staff

MEPs have backed changes to working conditions for EU officials designed to save over €1 billion a year and to improve ethical standards.

Amsterdam wins EU medicines agency on coin toss

The staff of the London-based EMA will move to the Dutch city of Amsterdam after Brexit, following a coin toss. Chance also decided the new home of the European Banking Authority: Paris.

MEP switches vote on 'private expenses' transparency

A small group of MEPs are looking into how members of the European Parliament spend the monthly €4,300 'private expenses' funded by taxpayer money. Last month, MEPs voted on transparency amendments on the funds.

MEP switches vote on 'private expenses' transparency

A small group of MEPs are looking into how members of the European Parliament spend the monthly €4,300 'private expenses' funded by taxpayer money. Last month, MEPs voted on transparency amendments on the funds.

News in Brief

  1. December euro summit still on, Tusk confirms
  2. EU calls for end to Kenya election crisis
  3. Report: Israeli PM invited to meet EU ministers
  4. French banks close Le Pen accounts
  5. Commission relaxes rules on labelling free range eggs
  6. Commission issues €34m fine over car equipment cartel
  7. Estonian presidency 'delighted' with emissions trading vote
  8. Mladic found guilty of genocide and war crimes

Stakeholders' Highlights

  1. Idealist Quarterly"Dear Politics, Time to Meet Creativity!" Afterwork Discussion & Networking
  2. Mission of China to the EUAmbassador Zhang Ming Received by Tusk; Bright Future for EU-China Relations
  3. EU2017EEEstonia, With the ECHAlliance, Introduces the Digital Health Society Declaration
  4. ILGA EuropeFreedom of Movement For All Families? Same Sex Couple Ask EU Court for Recognition
  5. European Jewish CongressEJC to French President Macron: We Oppose All Contact With Far-Right & Far-Left
  6. EPSUWith EU Pillar of Social Rights in Place, Time Is Ticking for Commission to Deliver
  7. ILGA EuropeBan on LGBTI Events in Ankara Must Be Overturned
  8. Bio-Based IndustriesBio-Based Industries: European Growth is in Our Nature!
  9. Dialogue PlatformErdogan's Most Vulnerable Victims: Women and Children
  10. UNICEFEuropean Parliament Marks World Children's Day by Launching Dialogue With Children
  11. European Jewish CongressAntisemitism in Europe Today: Is It Still a Threat to Free and Open Society?
  12. Counter BalanceNew Report: Juncker Plan Backs Billions in Fossil Fuels and Carbon-Heavy Infrastructure

Latest News

  1. Mali blames West for chaos in Libya
  2. Orban stokes up his voters with anti-Soros 'consultation'
  3. Commission warns Italy over high debt level
  4. Mladic found guilty for Bosnia genocide and war crimes
  5. Uber may face fines in EU for keeping data breach secret
  6. EU counter-propaganda 'harms' relations, Russia says
  7. The EU's half-hearted Ostpolitik
  8. Glyphosate: 1.3 million EU citizens call for ban