Proposal for a COUNCIL REGULATION (EC, EURATOM) adjusting with effect from 1.1.2004 the remuneration and pensions of officials and other servants of the European Communities and the weightings applied thereto

(presented by the Commission)

EXPLANATORY MEMORANDUM (Summary of Eurostat report)

1. PREAMBLE

In accordance with the political agreement reached in the Council on 29 September 2003, the 2003 annual adjustment of remunerations on the basis of the current method must, by way of exception, take effect from 1 January 2004.

The Commission has accordingly drafted a proposal [1] for a Regulation extending Annex XI until 30 June 2004. Pending the adoption of that extension, this proposal is based on Articles 64 and 65 of the Staff Regulations.

[1] COM(2003)612

Under Article 65 of the Staff Regulations the Council is required to undertake an annual review of the remuneration of officials and other servants of the Communities on the basis of a report from the Commission.

This report establishes the various parameters which have to be taken into account for the annual review, in particular the cost-of-living trend for Brussels (composite index comprising the joint index and the Brussels consumer price index), the trend in the purchasing power of civil service remuneration in the Member States (specific indicator), and the economic parities used to calculate weightings.

The calculations referred to in this proposal are based on the results of proposal COM (2003) 580 correcting remuneration and pensions by 1%.

2. TREND IN PURCHASING POWER OF THE REMUNERATION OF NATIONAL CIVIL SERVANTS

2.1. Specific indicator

Eurostat has worked out the trend in civil service remuneration on the basis of information provided by the Member States for the twelve-month period up to 1.7.2003, for each category of official in each Member State.

The specific indicator measuring the trend in the remuneration of national civil servants in central governments in net real terms for the twelve-month period up to 1.7.2003 is 1,1 %.

The figures for each Member State are shown in Table A below:

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2.1. Control indicators

By way of control indicators Eurostat shows the changes in real terms of per capita emoluments in general government 2,7 % and in central government 2,5 %.

These indicators are compared with the gross real specific indicator of 1,1 %.

3. COST-OF-LIVING TREND FOR BRUSSELS

The joint index measuring the rise in the cost of living in Brussels for the twelve months up to 1.7.2003 calculated by Eurostat is 102,3. The Belgian index (Brussels capital component) is 102,1 for the same period.

4. ECONOMIC PARITIES (Article 1(3) of Annex XI)

The economic parities used to establish the equivalence of purchasing power for the reference city, Brussels, and the other places of employment at 1.7.2003 are shown in Table B below.

Cost-of-living trends in the reference period between the effective dates of the economic parities (column 4) are indirectly derived from the product of the joint index for Brussels and the variation in the economic parity for the place of employment in question.

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1. INTERMEDIATE ADJUSTMENT

An initial adjustment for the change in the cost of living was made by the Council [2] for the reference period i.e. the second half of 2002 with effect from 1.1.2003, in respect of the following countries:

[2] on ...

- none

The adjustment to be made for the trend in the cost of living thus takes into account the interim adjustment for these countries.

2. ADJUSTMENTS PROPOSED

An adjustment from 1.1.2004 is required to take account of cost-of-living increases in the places of employment during the reference period.

Since the Brussels capital component of the Belgian index has risen by 2,1 % and the joint index by 2,3 % over the reference period of 1.7.2002- 1.7.2003, the cost-of-living weighting to be incorporated in the salary tables for Brussels is 2,3 % (25 % x 2,1 % + 75 % x 2,3 %).

The specific indicator measuring the trend in the purchasing power of civil servants in the central governments in the Member States recorded during the period 1.7.2002 to 1.7.2003 is 1,1 %.

This gives a net nominal increase of 3,4 % (102,3x 101,1 /100) in the remuneration of officials in Brussels and Luxembourg.

For the other places of employment the adjustments are derived indirectly from the product of this change and the variation in the economic parity.

For the purposes of this review, the effective date is 1.1.2004 for all places of employment except the following:

- none

3. Cumulated changes in the remuneration of national and Community civil servants

Between July 1990 and July 2002, the cumulative change in the purchasing power of national officials was 2,0%, which the salary adjustment Method passed on in the remuneration of Community civil servants.

If this change is set against the 28,1% cost-of-living increase in Brussels, the combined salary adjustment up to July 2002 is 30,7%.

Between July 2002 and July 2003, the change in the purchasing power of national civil servants was 1,1%.

The result is thus a cumulative change of 3,1% [3] in the purchasing power of Community civil servants over the 13 years period of application of the 1991 Method.

[3] Leaving out of account the loss in purchasing power caused by the temporary contribution.

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4. WEIGHTINGS

a) Incorporation of the increase for Brussels from 1.7.2002 to 1.7.2003 (3,4 %) would bring the weightings for Brussels/Luxembourg back to 100. Weightings for the other places of employment are directly determined by the differences between the economic parities calculated by Eurostat and the exchange rates applicable on 1.7.2003. The exchange rates are updated at the same time in accordance with Article 63 of the Staff Regulations (Table C).

b) The Council could decide in 2004, to establish new weightings effective retrospectively from 1.7.2004. These new weightings could lead to retroactive adjustments to remuneration and pensions (positive or negative) in respect of the period in 2004 for which payment has already been made on the basis of the 2003 operation. In this event, either arrears will be paid if there has been an upward adjustment as a result of the new weightings or if there has been a downward adjustment the sums overpaid from that date will be recovered.

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Proposal for a COUNCIL REGULATION (EC, EURATOM) adjusting with effect from 1.1.2004 the remuneration and pensions of officials and other servants of the European Communities and the weightings applied thereto

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to the Protocol on the Privileges and Immunities of the European Communities, and in particular Article 13 thereof,

Having regard to the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Communities laid down by Council Regulation (EEC, Euratom, ECSC) No 259/68, [4] as last amended by Regulation (EC, ECSC, Euratom) No ... [5], and in particular Articles 63, 64, 65, and 82 of the Staff Regulations, and the first paragraph of Article 20 and Article 64 of the Conditions of Employment,

[4] OJ L56, 4.3.68, p.1.

[5] OJ ..., ..., p.1.

Having regard to the proposal from the Commission [6],

[6] OJ C [...]

Whereas:

(1) In accordance with the political agreement reached in the Council on 29 September 2003, the 2003 annual adjustment of remunerations on the basis of the current method must, by way of exception, take effect from 1 January 2004. The Commission has accordingly drafted a proposal [7] for a Regulation extending Annex XI until 30 June 2004.

[7] COM(2003)612

(2) A review of the remuneration of officials and other servants carried out on the basis of a report by the Commission has shown that the remuneration and pensions of officials and other servants of the Communities should be adjusted under the 2003 annual review.

(3) The annual adjustment in respect of 2004 could entail the establishment before 31 December 2004 of new weightings with retroactive effect from 1 July 2004.

(4) These new weightings could lead to retroactive adjustments to remuneration and pensions (positive or negative) in respect of the period of 2004 for which payments have already been made on the basis of this Regulation.

(5) Provision should therefore be made for the payment of arrears in the event of an upward adjustment as a result of these weightings or for the recovery of sums overpaid in the event of a downward adjustment for the period between the effective date and the date of entry into force of the Council's decision on the annual adjustment in respect of 2004.

(6) Provision should be made for the effects of any such recovery to be spread over a period of not more than twelve months following the date of entry into force of the Council's decision on the annual adjustment in respect of 2004,

HAS ADOPTED THIS REGULATION:

Article 1

With effect from 1.1.2004 :

a) the table of basic monthly salaries in Article 66 of the Staff Regulations is replaced by the following:

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b) - EUR 186,14 is replaced by EUR 192,47 in Article 1(1) of Annex VII to the Staff Regulations,

- EUR 239,71 is replaced by EUR 247,86 in Article 2(1) of Annex VII to the Staff Regulations,

- EUR 428,22 is replaced by EUR 442,78 in the second sentence of Article 69 of the Staff Regulations and in the second subparagraph of Article 4(1) of Annex VII thereto,

- EUR 214,22 is replaced by EUR 221,50 in the first paragraph of Article 3 of Annex VII to the Staff Regulations.

Article 2

With effect from 1.1.2004, the table of basic monthly salaries in Article 63 of the Conditions of Employment of Other Servants is replaced by the following:

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Article 3

With effect from 1.1.2004 the fixed allowance referred to in Article 4a of Annex VII to the Staff Regulations shall be:

- EUR 115,51 per month for officials in Grade C4 or C5,

- EUR 177,10 per month for officials in Grade C1, C2 or C3.

Article 4

Pensions for which entitlement has accrued by 1.1.2004 shall be calculated from that date by reference to the table of basic monthly salaries laid down in Article 66 of the Staff Regulations, as amended by Article 1(a) of this Regulation.

Article 5

With effect from 1.1.2004, the date "1 July 2002" in the second paragraph of Article 63 of the Staff Regulations is replaced by "1 July 2003".

Article 6

1. With effect from 16 May 2003, the weightings applicable to the remuneration of officials and other servants employed in the countries and places listed below shall be as follows: - none

2. With effect from 1.1.2004, the weightings applicable to the remuneration of officials and other servants employed in the countries and places listed below shall be as follows:

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3. The weightings applicable to pensions shall be determined in accordance with Article 82(1) of the Staff Regulations. Articles 3 to 10 of Council Regulation (ECSC, EEC, Euratom) No 2175/88 of 18 July 1988 laying down the weightings applicable in third countries [8] shall remain in force.

[8] OJ L 191, 22.7.88, p.1.

4. These weightings could be adjusted by a Council regulation before 31 December 2004 establishing new weightings with effect from 1 July 2004. In this event the institutions shall make the corresponding positive or negative adjustment to the remuneration and pensions of the officials, former officials and other persons concerned with retroactive effect for the period between the effective date and the date of entry into force of the decision on the 2004 adjustment. If this retroactive adjustment necessitates the recovery of sums overpaid, such recovery may be spread over a period of not more than twelve months from the date of entry into force of the decision on the 2004 annual adjustment.

Article 7

With effect from 1.1.2004, the table in Article 10(1) of Annex VII to the Staff Regulations is replaced by the following:

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Article 8

With effect from 1.1.2004, the allowances for shiftwork laid down in Article 1 of Council Regulation (ECSC, EEC, Euratom) No 300/76 [9] shall be EUR 334,82, EUR 505,36, EUR 552,55 and EUR 753,31.

[9] Council Regulation (ECSC, EEC, Euratom) No 300/76 of 9 February 1976 determining the categories of officials entitled to allowances for shiftwork, and the rates and conditions thereof (OJ L 38, 13.2.76, p.1). This Regulation was supplemented by Regulation (Euratom, ECSC, EEC) No 1307/87 (OJ L 124, 13.5.87, p.6) and last amended by Regulation (EC, ECSC, Euratom,) No ... (OJ ..., ..., p.1).

Article 9

With effect from 1.1.2004, the amounts in Article 4 of Council Regulation (EEC, Euratom, ECSC) No 260/68 [10] shall be subject to a weighting of 4,833264.

[10] Regulation (EEC, Euratom, ECSC) No 260/68 of the Council of 29 February 1968 laying down the conditions and procedure for applying the tax for the benefit of the European Communities (OJ L 56, 4.3.1968, p. 8). Regulation as last amended by Regulation (EC, ECSC, Euratom) No ... (OJ ..., ..., p.1).

Article 10

This Regulation shall enter into force on the day following its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council

The President

FINANCIAL STATEMENT

Estimate of the budgetary implications over 12 months resulting from the annual adjustment of the remuneration and pensions of officials and other servants of the European Communities.

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The impact for the 2003 financial year is nil as there is on this occasion no retroactivity.

The calculations referred to in this proposal are based on the results of proposal COM (2003) 580 correcting remuneration and pensions by 1%.