ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(81)235
Vol.1981/0085

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(81)235 final
Strasbourg ,6thMay1981
ADDITIONAL COMMISSION COMMUNICATION TOTHECOUNCIL
onrulesfortheimplementation ofthesingleexceptional meausre
concerning officials' salaries
COM(81)235final

C<s^\vbS
ADDITIONAL COMMISSION COMMUNICATION TOTHECOUNCIL ONRULESFORTHE
IMPLEMENTATION OFTHESINGLEEXCEPTIONAL MEASURE CONCERNING OFFICIALS'
SALARIES
On18March1981theCommission senttheCouncil aCommunication on
asingleexceptional measureconcerning officials' salaries (C0M(81)135).
TheCommunication statedthatthegroundsforthisexceptional measure
weretobefoundindulyquantifiable economic andsocialphenomena .Oneof
thedetermining factorsinthedeterioration oftheCommunity 'seconomic and
socialsituation,asshownbythepersistence ofhighinflation andrising
unemployment ,seemsindeedtobeinadequate adjustment ofrealsalaries through­
outtheeconomyinrelation toavailable resources .Thegapintheevolution
ofthesetwovariables thusprovides asuitable overall economic indicator for
assessing thesizeofthephenomenon .
Thevarious methodsofcalculation aresetoutinthememoattached and,
forthethreeeconomic indicators theyproducethe1980figures (base:1967-
1971)are:
realpercapitasalaries
apparent productivity
realpercapitasalaries =95%productivity ascorrected bytermsoftrade
realpercapitasalaries _iq.6%productivity ascorrected toallowforunemployment
i
i
TheCommission considers thatthetotalsizeoftheexceptional measure
I
shouldbecalculated onthebasisofthesethreeindicators .
./.=6.4%
=9.5%
\

-2-
Forthepurposeofficials 1nactiveemployment oronsecondment would
contribute 10%oftheirbasicsalary,lessthebasicsalarycorresponding
togradeD/4,firststep(asgiveninArticle 66oftheStaffRegulations ),
asacrisislevy.
V -
Thelevywouldbespreadequallyoveraperiodoffiveyears.Itwould
beappliedforthefirsttimeon1July1981andwouldprogressively reachthe
~full10%on1July1985.
Theamountsaccruing fromthelevieswouldbeenteredintheCommunities'
budget.
\
TheStaffRegulations ofOfficials andtheConditions ofEmployment of
OtherServants wouldneedtoberevisedtothiseffect,provision beingmade
foranArticle 66aintheStaffRegulations andanArticle 63aintheCon­
ditionsofEmployment,Article20oftheConditions ofEmployment beingamended.
{• » »
TheCommission alsoreservestheright,atthe1986^jnnualexamination,
toproposethattheimpactofthesingleandexceptional njeasure bereviewed
inthelightoftheevolution oftheindicators usedtowofkouttheLevy10
percents.
TheCommission wouldbeprepared toconsider theintroduction ofaspecial
clausetocoverthesituation weretheeconomic situation todeteriorate dras­
tically.Ithasnotyetcometoafinalposition onthedetailsofsucha
clause.Itreserves ,'therighttodosoatalaterdate*
}
Asindicated above,,theCommission intendsinduecoursetoconvertthe
Communication intoaformalproposal assoonastheCouncil hasagreedin
principle onthemethodfortheadjustment ofofficials *salaries whichwas
proposed on18March1981andexpected tobeadopted on18Hay1981,itbeing
understood thatthedecision ontherevision ofthemethodandthesingleex­
ceptional measure formanindivisible whole.

COMMISSION
OFTHE
EUROPEAN COMMUNITIES
MEMORANDUM
1.TheCommission Communication totheCouncilontheapplication ofaspecial
one-offmeasureinrespectofstaffremuneration (C0M(81)135 final)specified
thatthismeasuremustbe"basedonduly(quantifiable economic andsocial
factors.Oneofthedetermining factorsintheCommunity *sdeteriorating
economic andsocialsituation ,asreflected inthepersistence ofhigh
inflation andrisingunemployment ,certainly appearstobethefailureof
realwagesandsalaries throughout theeconomytoadjustcompletely tothe
resources available .Thegapbetweenthesetwovariables isasuitable
overalleconomicindicator forassessing thephenomenon weareseekingto
measure#
2.SincetheMethodforadjusting salaries wasfirstappliedin1972,the
gapbetweensalaries inrealtermsandavailable resources shouldbemeasures
from1971•Afurtherjustification isthat1971was&yearoffullemployment .
However,theaverageoftheperiod19^7to1971producesaneconomically stal^Le
baseforcalculation .Theunemployment ratethenwas2$(disregarding
frictional unemployment )andso,incomparison withthecurrentrateof7$»
thismaybeconsidered atimeoffullemployment .
3.Therearethreedifferent waysofmakingthecalculation depending onthe
economicvariable usedtomeasurechangesinavailable resources :productivity
percapita(Method 1),productivity correctedforchangesinthetermsof
trade(Method2)andnotionalfullemployment productivity (Method3)•
0
4«Method 1measuresthegapbetweenrealpercapitawagesandsalaries and
apparent productivity perworker.Table 1showsthatthisgapincreased by
6.4percentage pointsfrom1967–71to1980. '
5.Thedetermination ofthegrowthrateofrealpercapitawagesandsalaries
onthebasisofthevolumeofgoodsandservices producedintheCommunity
Provisionol address:RuedelaLoi200,B-1040Brussels-Téléphoné350040-35 8040-Telegrophic oddress:fCO.V.EUR3russels »-
Telex:.COMEURBRU 21877.

divided "bythenumber ofpersons employed ignores theeffects of
international trade onthe Community .If,foragiven volume ofCommunity
production ,theterms oftrade deteriorate (import prices rising faster
than export prices ),itwill benecessary toexport more tomaintain imports
attherequired level andtheshare ofproductivity which canbedistributed
inthe form ofincomes isreduced .
6.Method 2therefore attempts tocalculate the amount ofproductivity
after correction forthe terms oftrade andmeasure the gapwhich has opened
upbetween real per capita wages and salaries andproductivity asso
measured .Table 2shows that real per capita wages and salaries increased
by9*5percentage points more than corrected productivity over theperiod
1967-71 to1980 .
7.Method 3consists ofdemonstrating arelationship between the surplus
ofreal per capita wages and salaries paid andthe quantity cfunemployment
or,inother words ,calculating productivity notonthebasis ofthenumber
ofworkers actually employed butonafigure obtained byincluding the
unemployed with the economically active population .
Changes inreal per capi tawages 3,nd salaries aretherefore compared with
changes innotional full employment productivity with the same quantity of
available resources being distributed among alarger number ofpeople .A
newseries ofdifferences between real per capita wages and salaries and
notional productivity has been calculated onthe same annual basis asused
fortheother methods .Between 19^7-71 andI98O ,real percapita wages and
salaries rose by10,6 percentage points more than notional full employment
productivity (Table 3).
8.These three procedures furnish three economic indicators which are
different inmethod but similar with regard tothenature ofthephenomena
which they seek tomeasure .Inthis sense they areinterchangeable ,not
complementary® The first shows howper capita wages and salaries should have
changed tokeep thedistribution ofnational income unchanged ,thesecond
shows howthey should vs.vs changed toavoid underemployment andthethird
shows howthey should have changed topreserve full employment .

Table1:Gapbetweenrealpercapitawagesandsalaries andapparentproductivity (EUR9)
Year GDPinvolumeterms^
(1)Total
employ-
ment
(pillions)
(2)Apparent
productivityh)ν(2)Real^percapitawagesand 0salaries'Gap
(4)«τ(3)
1967-71.100
(3) (4).(5)
.1967-71 922,3 103,1-100,0 100,0 1C0,0
1972 1042,6 Î03,5 112,9 117,7 104,3
1973 1105,6 104,7 118,4 124,1 104,8
1974 1125,0 104,8 120,3 128,3 106,6
1975 t1C8,6 103,4 120,1 132,5 110,3
1976 1163,1 103,3 126,1 135,8 ~.107,7
1977 1188,8 103,7 128,5 137,1 106,7
1973 1225,9 104,1 131,9 .141,5 107,3
1979 1266,1 1C4,8 .135,5 144,5 106,6
1983*1222,6 1C4,8 *137,2 146,0 106,4
'000million 1975purchasing powerstandards at1975pricesandpurchasing powerparities.
? ••Compensation ofemployees peremployeeintheeconomyasawholedeflated bytheconsumerpriceindex#
>.. »... «.*Estimates onthe.Ijasiso£budgetsat9.February 1981,
Sources :1967-1979 Nationalaccounts ESA-1981Aggregates#

Table2:Gapbetweenrealpercapitawaflesandsalaries andapparent productivity oflabourcorrected forchangesin
thetermsof"trade(EUR9) ~
I
Year
!GDPin
volume
terms^
(1)Exportsin
volume
terms1
(2)Export
prices
(1975-ico)
(3),Import
prices
(I975-IOO )
(4)Exportsin
constant
importprloes
(2)x(3)–(4)
(5)Gifadjusted
forchangesintermsoftrade
(l)-(2)+(5:
(6)Total
employment
(millions)
(7)Proci·comforchangesinienasoftrade
(6)r(7)Ree.lwages&salariegperheadGap >-
(9)-f(8)
1967-71 «=100
-(8) (9) (10)
Ι19Λ7-71 v?2,3 ..'191,1 (,7,7 57,9 206,9 938,1 103,1 100,0 100,0 1C3,0
!!y<- 1.242,6. 243,6 69,e,'62,6 2?u,i 1C69,1103',5113,5 117,7 103,7
1973 1135,6 271,4 75,4 70,4 290,7 1124,4 104,7 118,1 105,1
1974'1125,0 293,7 92,9 95,3 22'.,4 1115,7 10'.,R'117,0 128,3 139,7
1975 11:3,6 253,3 100,0 120,0 283,3 11:3,6 103,4 117,3 132,5 112,5
1976'1163,1 313,9 -1:9,6112,2 307,2 1156,4 103,3 123,0 '135,8 110,4
197711?3,3 329,7 118,5 121,5 321,3 ■1Uü,9 103,7 125,2 137,1 .109,5 .
1978'225,9 345,3 123,4 122,5 347,8 1223,4 104,1 12/,7 141,5 1C9,1
1979 12i6,1 3£6,5 135,3 135,9 .364,9 1264,5 104,8 132,7 144,5 103,9
r-.-:Q3 374,2 151,1 156,3*161,3 i;?c,2 *1C4,3.*1:3,?.146,0 109,5
1.– .. '
2*000million1975purchasing powerstandards andat1975exchangerates.
^Compensation ofemployees peremployeeintheeconomyasawhole,deflated bytheconsumerpriceindex.Estimates onthebasisofbudgetsat9February 1981.
Sources:1967-79Nationalaccounts ESA-1981Aggregates .
Formulaforthecalculation ofproductivity corrected forchangesinthetermsoftrade
sv=6f-i­
• • ' "t X l t t
Dis . <Prod"Productivity correctedforchangesinthetermsoftrade*
Dis
«VolumeofGDP(in1975purchasing powerstandards andat1975ratesofexchange)availablefordistribution .t .
PM^.=Indexofimport"pricest■»YearEnp^»Totalemployment ®Pvoi-j-GDPinvolumeterms-Valueofexports
PX-t=Indexofexportprices

Tet'blo 3?Gapbetween realpercapita wagesandsalaries andapparent productivity oxxauou^OOI'PUCTfeU .IIBT4UllUlHUlUAMiidi *•iuohvi
GDPin Total Unemployed Economically Productivity Realper
volumetermsemployment (thousands )active corrected forcapitawages^Gap
YEAH (millions) population unemployment andsalaries
(2)+(3)(1)*(4) (6)4-(5)~
I ' . 1967-71=100
1
( ' (1) (2) (3). (4) (5) (6) (7)
Year t-100.01967-1971 922.3 103,1 2363 105.5 '100.0 100.0
1972 iü;¿.6- 103.5 2872 106.4 112.1 117.7 105.0
1973 11L.¿.Ò 104.7 2653 107.3 117.9 .124.1 1C5.3
1974 1125.0 1C4.8 3129 107.9 119.3 123.3 107.5
'1975 11C-.6 ■103.4 •4648 103.1 -•117.3 .132.'5,113.0
1976 1163.1 103.3 5324 103.6 122.5 135.8 •110.9
1977 'ms.?. 103.7 S802 109.5 124.3 137.1 110.3
197S' 1225.9 104.1 6063 110.2 127.3- 141.5 11».2
1979 1?c6.1 104.8 6215 111.0 -130.5 144.5 110.7
19S0(3)Y 12Î2.6 104.8 6569
•,111.3 131.9
I146.0 110.6
1
2*000million1975purchasing powerstandards andat1975exchangerates.
^Compensation ofemployeesperemployeeintheeconomyasawholedeflated trytheconsumerpriceindex.Estimates onthebasisofbudgetsat9February 1981•
Sourcest 1967-79National accounts ESA–1981Aggregates
(a)1980estimates basedoneconomicbudgetsof9February 1981
Numberofunemployed fromEuropean Economy No7»November 1980
Formulaforthecalculation ofproductivity corrected forunemployment .
ProdcorrGDPvolt
PopAc
PopAc,--Bmp.+unemp^
Prodorr_Productivity correctedforunemploymentGDP,,volt
.PopAc^.
Emp^
Unemp ,VolumeofGDP(ini1975purchasing powerstandards andat
1975ratesofexchange )
Economically activepopulation
Totalemployment
Registered unemployed
t =Year