Brussels, 16.11.2004

COM(2004) 761 final

Proposal for a

COUNCIL (EC, EURATOM) REGULATION

adjusting with effect from 1 July 2004 the remuneration and pensions of officials and other servants of the European Communities and the correction coefficients applied thereto

(presented by the Commission){SEC (2004) 1445 }

EXPLANATORY MEMORANDUM

PREAMBLE

In accordance with Article 1 of Annex XI to the Staff Regulations, Eurostat has drawn up a report on changes in the cost of living in Brussels, changes in the purchasing power of remuneration in national civil services, and the economic parities from which the correction coefficients derive.

Under Article 3 of that Annex XI, the Council, acting on a Commission proposal, is to take a decision before the end of each year adjusting remuneration and pensions, with effect from 1 July.

Changes in the purchasing power of remuneration of national civil servants (specific indicator)

Eurostat has worked out the changes in the net remuneration, exclusive of inflation, of national civil servants in central government in the eight Member States listed in Article 1(4) of Annex XI on the basis of information provided by those Member States.

The average change in the purchasing power of national civil servants in central government in the period July 2003 - July 2004 measured by the specific indicator is equal to -1.2%.

Changes in the cost of living for Brussels (international index)

Eurostat has determined, on the basis of data provided by the Belgian authorities, the changes in the cost of living for officials of the European Communities in Brussels.

The change in the cost of living in Brussels in the period June 2003 - June 2004 measured by the international indicator calculated by Eurostat is equal to 1.9%.

Adjustment of remuneration and pensions in Belgium and Luxembourg

The amount of the adjustment is equal to the product of the Brussels International Index (1.9%) and the specific indicator (-1.2%).

[(101.9% x 98.8%) / 100] –100 = 0.7%

The net adjustment of remuneration and pensions in Belgium and Luxembourg is therefore 0.7%.

Under Article 3 of Annex XI to the Staff Regulations, no correction coefficient is applicable in Belgium and Luxembourg.

Adjustment of remuneration and pensions outside Belgium and Luxembourg

Outside Belgium and Luxembourg the adjustment of remuneration and pensions is obtained by multiplying the net adjustment in Belgium and Luxembourg and the change in correction coefficients and in the exchange rate.

The correction coefficients applicable to remuneration, pensions and transfers of part of the remuneration that are set out in the Regulation have been calculated as follows:

Correction coefficients for officials outside Belgium and Luxembourg

Eurostat has calculated, in agreement with national statistical institutes, the economic parities which fix purchasing power parities on 1 July 2004 between the remuneration paid by the European Communities in the reference city, Brussels, and in the other places of employment.

The correction coefficients applying to the remuneration of officials of the European Communities serving in the Member States outside Belgium and Luxembourg are directly determined by the ratios between these economic parities and the exchange rates applying to the implementation of the general budget of the European Communities on 1 July 2004.

Correction coefficients for pensioners outside Belgium and Luxembourg and correction coefficients for transfers

Eurostat has calculated, in agreement with national statistical institutes, the economic parities which fix purchasing power parities on 1 July 2004 between the pension paid by the European Communities in the reference country, Belgium, and that paid in the other places of residence.

The correction coefficients calculated for the pensions of individuals living outside Belgium and Luxembourg in the various countries are determined by the ratios between these economic parities and the exchange rates on 1 July 2004.

Under Article 17 of Annex VII to the Staff Regulations, these correction coefficients are directly applied to transfers made by officials and other agents from 1 January 2005.

Under Article 20 of Annex XIII to the Staff Regulations, correction coefficients apply to the part of the pension corresponding to pension rights acquired before 1 May 2004.

Under Article 20(2) thereof, the correction coefficients applicable to pensions are calculated by adding 80% of the correction coefficients applicable to officials and 20% of the correction coefficients calculated for pensions.

From 1 May 2005, the correction coefficients will be calculated by adding 60% of the correction coefficients applicable to officials to 40% of the correction coefficients calculated for pensions.

Date on which correction coefficients enter into effect

These correction coefficients take effect on 1 July 2004 for all places except those with a high cost-of-living increase, for which the correction coefficient is to come into effect on 16 May if the increase in the cost of living is greater than 6.3%, or 1 May if it is greater than 12.6%.

Changes in the cost of living outside Belgium and Luxembourg are measured by the change in the implicit indices. These indices are calculated by multiplying the Brussels International Index by the change in the economic parity.

The date on which this adjustment shall enter into effect is earlier for the places listed below:

- correction coefficients for officials: nowhere;

- correction coefficients for pensioners: nowhere.

Other factors affecting net remuneration

When the Council adopted its decision of 22 March 2004 renewing the method of adjusting remuneration (Annex XI to the Staff Regulations), it also decided:

- to introduce a special levy on remuneration at a rate increasing from 2.50% to 2.93%, with effect on 1 January 2005;

- to provide for a new method for adjusting the staff rate of contribution to the pension scheme. As a result, the rate will increase from 9.25% to 9.75%, with effect on 1 July 2004.

Proposal for a

COUNCIL (EC, EURATOM) REGULATION

adjusting with effect from 1 July 2004 the remuneration and pensions of officials and other servants of the European Communities and the correction coefficients 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 Regulation (EEC, Euratom, ECSC) No 259/68[1], and in particular Articles 63, 64, 65 and 82 of the Staff Regulations and Annexes VII, XI and XIII thereto, and the first paragraph of Article 20, Article 64 and Article 92 of the Conditions of employment of other servants,

Having regard to the proposal from the Commission,

Whereas:

In order to guarantee that the purchasing power of Community officials and other servants develops in parallel with that of national civil servants in the Member States, the remuneration and pensions of officials and other servants of the Communities should be adjusted under the 2004 annual review,

HAS ADOPTED THIS REGULATION:

Article 1

With effect from 1 July 2004, the date “1 July 2003” in the second paragraph of Article 63 of the Staff Regulations shall be replaced by “1 July 2004”.

Article 2

With effect from 1 July 2004, the table of basic monthly salaries in Article 66 of the Staff Regulations applicable for the purposes of calculating remuneration and pensions shall be replaced by the following:

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Article 3

With effect from 16 May 2004, the correction coefficients applicable to the remuneration of officials and other servants employed in the countries and places listed below shall be as follows:- none.

With effect from 16 May 2004, the correction coefficients applicable to the pensions of officials and other servants resident in the countries listed below shall be as follows:

- none.

Article 4

With effect from 1 July 2004, the correction coefficients applicable under Article 64 of the Staff Regulations to the remuneration of officials and other servants shall be as indicated in column 2 of the following table.

With effect from 1 January 2005, the correction coefficients applicable under Article 17(3) of Annex VII to the Staff Regulations to transfers by officials and other servants shall be as indicated in column 3 of the following table.

With effect from 1 July 2004, the correction coefficients applicable to pensions under Article 20(2) of Annex XIII to the Staff Regulations shall be as indicated in column 4 of the following table.

With effect from 1 May 2005, the correction coefficients applicable to pensions under Article 20(2) of Annex XIII to the Staff Regulations shall be as indicated in column 5 of the following table.

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Article 5

With effect from 1 July 2004, the amount of the parental leave allowance referred to in Article 42a of the Staff Regulations shall be EUR 804.36 and EUR 1 072.48 for single parents.

Article 6

With effect from 1 July 2004 the basic amount of the household allowance referred to in Article 1(1) of Annex VII to the Staff Regulations shall be EUR 150.44.

With effect from 1 July 2004 the amount of the dependent child allowance referred to in Article 2(1) of Annex VII to the Staff Regulations shall be EUR 328.73.

With effect from 1 July 2004 the amount of the education allowance referred to in Article 3(1) of Annex VII to the Staff Regulations shall be EUR 223.05.

With effect from 1 July 2004 the amount of the education allowance referred to in Article 3(2) of Annex VII to the Staff Regulations shall be EUR 80.30.

With effect from 1 July 2004, the minimum amount of the expatriation allowance referred to in Article 69 of the Staff Regulations and in the second subparagraph of Article 4(1) of Annex VII thereto shall be EUR 445.88.

Article 7

With effect from 1 January 2005, the kilometric allowance referred to in Article 8 of Annex VII to the Staff Regulations shall be adjusted as follows :

EUR 0 for every km from 0 to 200 km

EUR 0.3343 for every km from 201 to 1 000 km

EUR 0.5572 for every km from 1 001 to 2 000 km

EUR 0.3343 for every km from 2 001 to 3 000 km

EUR 0.1114 for every km from 3 001 to 4 000 km

EUR 0.0536 for every km from 4 001 to 10 000 km

EUR 0 for every km over 10 000 km.

To the above kilometric allowance a flat-rate supplement shall be added, amounting to:

- EUR 167.16 if the distance by train between the place of employment and the place of origin is between 725 km and 1 450 km,

- EUR 334.31 if the distance by train between the place of employment and the place of origin is greater than 1 450 km,

Article 8

With effect from 1 July 2004 the daily subsistence allowance referred to in Article 10 of Annex VII to the Staff Regulations shall be:

- EUR 34.55 for an official who is entitled to the household allowance,

- EUR 27.86 for an official who is not entitled to the household allowance.

Article 9

With effect from 1 July 2004, the lower limit for the installation allowance referred to in Article 24(3) of the Conditions of employment of other servants shall be:

- EUR 983.69 for a servant who is entitled to the household allowance,

- EUR 584.90 for a servant who is not entitled to the household allowance.

Article 10

With effect from 1 July 2004, for the unemployment allowance referred to in the second subparagraph of Article 28a(3) of the Conditions of employment of other servants, the lower limit shall be EUR 1 179.72, the upper limit shall be EUR 2 359.44 and the standard allowance shall be EUR 1 072.48.

Article 11

With effect from 1 July 2004, the table of basic monthly salaries in Article 63 of the Conditions of employment of other servants shall be replaced by the following:

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Article 12

With effect from 1 July 2004, the table of basic monthly salaries in Article 93 of the Conditions of employment of other servants shall be replaced by the following:

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Article 13

With effect from 1 July 2004, the lower limit for the installation allowance referred to in Article 94 of the Conditions of employment of other servants shall be:

- EUR 739.90 for a servant who is entitled to the household allowance,

- EUR 438.67 for a servant who is not entitled to the household allowance.

Article 14

With effect from 1 July 2004, for the unemployment allowance referred to in the second subparagraph of Article 96(3) of the Conditions of employment of other servants, the lower limit shall be EUR 884.79, the upper limit shall be EUR 1 769.58 and the standard allowance shall be EUR 804.36.

Article 15

With effect from 1 July 2004, the allowances for shiftwork laid down in Article 1 of Council Regulation (ECSC, EEC, Euratom) No 300/76[2] shall be EUR 337.16, EUR 508.90, EUR 556.42 and EUR 758.58.

Article 16

With effect from 1 July 2004, the amounts in Article 4 of Regulation (EEC, Euratom, ECSC) No 260/68[3] shall be subject to a coefficient of 4.867097.

Article 17

With effect from 1 July 2004, the table in Article 8(1) of Annex XIII to the Staff Regulations shall be replaced by the following:

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Article 18

With effect from 1 July 2004 the amount of the dependent child allowance referred to in Article 14(1) of Annex XIII to the Staff Regulations shall be as follows:

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Article 19

With effect from 1 July 2004 the amount of the education allowance referred to in Article 15(1) of Annex XIII to the Staff Regulations shall be as follows:

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Article 20

With effect from 1 July 2004, for the purposes of application of Article 18 of Annex XIII to the Staff Regulations, the amount of the fixed allowance mentioned in the former Article 4a of Annex VII to the Staff Regulations in force before 1 May 2004 shall be:

- EUR 116.32 per month for officials in Grade C4 or C5,

- EUR 178.34 per month for officials in Grade C1, C2 or C3.

Article 21

This Regulation shall enter into force on the day following that of 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

+++++ TABLE +++++

[1] OJ L 56, 4.3.1968, p. 1. Regulation as last amended by Regulation (EC, Euratom) No …. (OJ L .., …, p. ..).

[2] 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, 13.2.1976, p. 1). Regulation as supplemented by Regulation (Euratom, ECSC, EEC) No 1307/87 (OJ L 124, 13.5.1987, p. 6) and last amended by Regulation (EC, Euratom,) No … (OJ L …, 1.1.2004, p. 1).

[3] (6) 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, Euratom) No …. (OJ L .., …, p. ..).