EU Commission Proposes Civil Service Cuts

The European Commission formally adopted Tuesday a package of proposed staff reforms that would deliver €1 billion in savings by 2020, and more than €1 billion every year in the longer term. This would allow the EU to freeze operational expenditure for administration until 2020.

The proposal increases the retirement age, combines a 5% cut in staff with an increase in weekly working hours, lowers salaries in certain areas, increases a special solidarity levy and simplifies the method used for annual adjustments to salaries and pensions.

According to Vice-President Maroš Šefčovič, “The European institutions and their staff face great challenges. However, I am convinced that they can meet these challenges by working harder, longer and with greater efficiency. The proposal strikes the right balance between the necessary drive for economies and the ability of the institutions to deliver their policies.”

Šefčovič added: “This is also the politically appropriate and legally sound response to the Member States’ request to suspend this year’s annual pay adjustment because of the crisis. This wasn’t possible because the strict legal criteria for doing so were not met.”

The proposal includes:

• A 5% reduction of staff in all institutions over the period 2013-17, through normal turnover of staff.
• An increase in the minimum working week for staff in all institutions from 37.5 hours to 40 hours, without compensatory wage adjustments.
• The normal retirement age will increase from 63 to 65. The possibility of working voluntarily until 67 will be made easier.
• In order to take account of the current difficult economic situation, the special levy (tax in addition to income tax), which will expire in 2013, will not only be replaced by a new ‘solidarity levy’ but also raised to 6% (currently 5.5%).
• The rules on early retirement will be substantially restricted (increase of minimum age for early retirement from 55 to 58; access to the scheme without a reduction of pension rights will be reduced by 50%).
• Access to the highest grades and salaries in the “assistant” career will be restricted to the best performing assistants who successfully apply for a post with the highest level of responsibilities in this category.
• Salaries of new secretarial and clerical staff will be lowered by around 18%.
• Other measures include: a new and simplified method for adjusting salaries and pensions based on the political decisions taken by all 27 Member States for their national civil servants, a new and simplified exception clause to react quickly to an economic crisis, a reduction in the maximum number of leave days granted to staff for their annual trip to their home countries from six days to three, a modernised way to calculate the distance to the home country which will reduce individual allowances, an extension in the maximum duration of contracts for contract agents in the institutions from three years to six, and more consistent rules for staff in EU agencies.

Background

The proposals were initially unveiled at the end of June, but have been partially amended following nearly six months of discussions and negotiations with staff representatives, Member States and the administrations of other institutions.

In order to preserve the thrust of the proposal and its financial impact, without harming the EU institutions’ ability to recruit and retain highly qualified staff, the key elements of the June proposal remained unchanged.

Main changes to the initial proposal:

• Increase of the proposed solidarity levy to be paid by staff from 5.5% to 6%.
• Secretarial and clerical tasks will continue to be carried out by officials (instead of being transferred to contractual staff as proposed initially). However, a new type of career structure will be introduced for them with lower salaries and career perspectives corresponding to the level of responsibilities.
• The method used for annual adjustments to salaries and pensions will be simplified and extended for another 10 years (instead of eight).
• As of 1 January 2013, all 27 Member States will be used to track the evolution of national civil servants’ spending power, a key element of the method. (This replaces the original proposal simply to add Sweden and Poland to the existing sample of 8 Member States).
• The maximum duration of employment of contract agents in the EU institutions will be increased from three to six years (instead of five).

The revised package of proposals will now be sent to the Council and European Parliament for further discussion and adoption by the ordinary legislative procedure.