Proposal for a COUNCIL REGULATION adjusting the correction coefficients applicable to the remuneration and pensions of officials and other servants of the European Union
Date: 2012-05-25
Institutions: European Commission
Subjects: Estonia, European official, remuneration of work, servant (EU)

EUROPEAN COMMISSION 

Brussels, 25.5.2012  
COM(2012) 234 final 

2012/0118 (NLE) 

Proposal for a 

COUNCIL REGULATION 

adjusting the correction coefficients applicable to the remuneration and pensions of 
officials and other servants of the European Union 

{SWD(2012) 134 final} 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

In  accordance  with  Article  4(1)  of  Annex XI  to  the  Staff  Regulations,  intermediate 
adjustments  of  remuneration  and  pensions  under  Article  65(2)  of  the  Staff 
Regulations are to be made, on the basis of information provided by Eurostat, in the 
event of a substantial change in the cost of living between June and December, with 
due allowance being made for the forecast of the change in purchasing power during 
the current annual reference period. 

Any  Commission  proposal  needed  is  to  be  sent  to  the  Council  not  later  than  the 
second half of April. 

•  General context  

In  accordance  with  Article  6(1)  of  Annex XI  to  the  Staff  Regulations,  intermediate 
adjustments  are  to  be  made  for  all  places  (including  Brussels)  if  the  sensitivity 
threshold has been reached or exceeded in Brussels. If that sensitivity threshold for 
Brussels  is  not  reached,  intermediate  adjustments  are  only  to  be  made  for  those 
places where the sensitivity threshold has been exceeded. 

In accordance with Article 7 of Annex XI to the Staff Regulations, the amount of the 
intermediate  adjustment  is  the  Brussels  International  Index  multiplied,  where 
appropriate, by half of the specific indicator forecast if this is negative. 

The  specific  indicator  measures  changes  in  the  real  net  remuneration,  exclusive  of 
inflation, of national civil servants in Member States’ central governments. Eurostat 
has  calculated  this  indicator  on  the  basis  of  the  information  supplied  by  the  eight 
Member States referred to in Article 1(4) of Annex XI to the Staff Regulations. 

The Brussels International Index measures changes in the cost of living in Brussels 
for  officials  and  other  servants  of  the  European  Union.  Eurostat  has  drawn  up  this 
index on the basis of the data provided by the Belgian authorities. 

The correction coefficients are the ratio between the relevant economic parity and the 
exchange  rate  provided  for  in  Article  63  of  the  Staff  Regulations  multiplied,  if  the 
adjustment threshold is not reached for Brussels, by the amount of the adjustment. 

The economic parities for remuneration establish the purchasing power equivalence 
of the remuneration paid in Brussels, as the reference city, with that paid in the other 
places  of  employment.  Eurostat  has  calculated  those  parities  in  agreement  with  the 
national statistical bodies of the Member States. 

The economic parities for pensions establish the purchasing power equivalence of the 
pension  paid  in  Belgium,  as  the  reference  country,  with  that  paid  in  the  other 
countries  of  residence.  Eurostat  has  calculated  those  parities  in  agreement  with  the 
national statistical bodies of the Member States. 

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•  Existing provisions in the area of the proposal 

This  proposal  is  in  addition  to  the  proposal  presented  each  year  for  adjusting 
remuneration and pensions. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

•  Consultation of interested parties 

Methods  of  consultation  used,  main  sectors  covered  and  general  profile  of 
respondents 

The  elements  of  the  proposal  have  been  discussed  with  the  staff  representatives  in 
accordance with the appropriate procedures. 

Summary of replies received and the way in which they have been taken into account 

The proposal takes account of the opinions of the parties consulted. 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

–  The purpose of the proposal is to adjust remuneration and pensions in accordance 

with the legislation in force. 

–  The legislation in force permits no alternative. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

In accordance with Article 4 of Annex XI to the Staff Regulations, the purpose of the 
proposed action is to adjust remuneration and pensions in those places in which there 
has been a substantial change in the cost of living. 

The change in the cost of living for Brussels, measured by the Brussels International 
Index, over the period June to December of the previous year, is 1.1 %.  

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

The  sensitivity  threshold  for  a  substantial  change  in  the  cost  of  living  is  the 
percentage  corresponding  to  7 %  for  a  twelve-month  period  (3.5 %  for  a  six-month 
period). 

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The implicit index applicable to remuneration has exceeded the sensitivity threshold 
in  Estonia  (4.1 %).  The  implicit  index  applicable  to  pensions  has  not  reached  the 
sensitivity threshold in any of the countries. 

The  amount  of  the  intermediate  adjustment  is  the  Brussels  International  Index 
multiplied,  where  appropriate,  by  half  of  the  specific  indicator  forecast  if  this  is 
negative. 

The  specific  indicator  forecast  is  -1.6%,  and  thus  the  amount  of  the  intermediate 
adjustment is 0.3 %. 

The correction coefficients are the ratio between the relevant economic parity and the 
exchange  rate  multiplied,  if  the  adjustment  sensitivity  threshold  is  not  reached  for 
Brussels, by the amount of the intermediate adjustment. 

The  new  correction  coefficients  take  effect  on  1  January.  However,  for  those 
countries or places whose implicit index is greater than 6.3 %, they take effect on 16 
November. For those countries or places whose implicit index is greater than 12.6 %, 
they take effect on 1 November. 

The correction coefficient for Tallinn calculated for December 2011 (on the basis of 
PPP for staff at December 2011) is 77.6. As a result, taking into account the amount of the 
intermediate  adjustment,  with  effect  from  1  January  2012,  the  correction  coefficient 
applicable to remuneration of officials and other servants of the European Union in 
Estonia  is  77.8.  The  correction  coefficients  applicable  to  pensions  and  transfers 
remain unchanged. 

•  Legal basis 

The Staff Regulations, and in particular Annex XI thereto, constitute the legal basis. 

•  Subsidiarity principle 

The  proposal  concerns  an  area  that  falls  within  the  exclusive  competence  of  the 
Union. The principle of subsidiarity does not therefore apply. 

•  Proportionality principle 

The  proposal  is  consistent  with  the  principle  of  proportionality  for  the  following 
reasons: 

–  Annex XI to the Staff Regulations provides for a Council Regulation. 

–  The financial burden results directly from application of the method of adjustment 

of remuneration and pensions provided for in the Staff Regulations. 

•  Choice of instruments 

Proposed instrument(s): Regulation. 

Other instruments would have been inappropriate for the following reasons: 

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–  Annex XI to the Staff Regulations provides for a Council Regulation. 

4. 

BUDGETARY IMPLICATION 

The  impact  of  the  adjustment  to  the  correction  coefficients  applicable  to  the 
remuneration and pensions of officials and other servants of the European Union on 
both administrative expenditure is detailed in the financial statement annexed hereto. 

Although  the  intermediate adjustment takes into account the increase in the cost of 
living  for  EU  staff  in  Estonia,  it  results  in  lower  expenditure.  This  is  due  to  the 
Council's  failure  to  adopt  the  Commission  Proposal  on  the  annual  adjustment1  in 
December  2011.  The  2011  annual  adjustment  would  have  lowered  the  value  of  the 
correction  coefficient  for  Estonia  from  78.5  to  75.4.  However,  as  the  annual 
adjustment  was  not  adopted,  the  former  value  of  78.5  remained  in  force.  The  new 
Eurostat calculation for the intermediate adjustment shows that the cost of living in 
Estonia increased from 75.4 to 77.8. Since this new intermediate adjustment value is 
lower than the value currently in force, the intermediate adjustment results in lower 
expenditure. 

1 

COM (2011) 820. 

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2012/0118 (NLE) 

Proposal for a 

COUNCIL REGULATION 

adjusting the correction coefficients applicable to the remuneration and pensions of 
officials and other servants of the European Union 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, 

Having regard to the Protocol on the Privileges and Immunities of the European Union, and in 
particular Article 12 thereof, 

Having  regard  to  the  Staff  Regulations  of  Officials  of  the  European  Union  and  to  the 
Conditions of Employment of other servants of the Union, as laid down by Regulation (EEC, 
Euratom, ECSC) No 259/682, and in particular Articles 64, 65(2) of the Staff Regulations and 
Annexes VII, XI and XIII thereto, and the first paragraph of Article 20, Articles 64 and 92 of 
the Conditions of Employment of Other Servants, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

There was a substantial increase in the cost of living in Estonia in the period from June 
to December 2011; the correction coefficients applied to the remuneration of officials 
and other servants of the Union should therefore be adjusted. 

HAS ADOPTED THIS REGULATION: 

Article 1 

With effect from 1  January 2012, the correction coefficients applicable, under Article 64 of 
the  Staff  Regulations,  to  the  remuneration  of  officials  and  other  servants  employed  in  the 
countries and places listed below shall be as follows: 

–  Estonia 77,8. 

2 

OJ L 56, 4.3.1968, p. 1. 

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Article 2 

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 

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Annexe 

LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative  

Proposal for a Council Regulation adjusting the correction coefficients applicable to 
the remuneration and pensions of officials and other servants of the European Union 

1.2. 

Policy area(s) concerned in the ABM/ABB structure3  

All areas and activities are potentially concerned. 

1.3. 

Nature of the proposal/initiative  

(cid:58) The proposal/initiative relates to a new action (periodical, adjusting the regulation in 
force) 

1.4. 

Objectives 

3 

ABM: Activity-Based Management – ABB: Activity-Based Budgeting. 

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1.4.1.  Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

The  adjustment  of  the  correction  coefficient  applicable  to  the  remuneration  of 
officials and other servants of the European Union in Estonia following a substantial 
change  in  the  cost  of  living  there  will  result  in  maintaining  the  purchasing  power 
equivalence  between  different  places  of  employment  as  provided  in  the  Staff 
Regulations.  

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term  

the  European  Union  are  adjusted,  and 

To ensure that in the event of a substantial change in the cost of living, the correction 
coefficients  applicable  to  the  remuneration  and  pensions  of  officials  and  other 
if  appropriate  applied 
servants  of 
retrospectively.  To  ensure  that  evolution  of  the  purchasing  power  of  EU  civil 
servants' remuneration and pensions follows the changes in the purchasing power of 
civil servants of central government in the Member States, as referred to in Annex XI 
to  the  Staff  Regulations.  To  ensure  that  the  parallelism  of  purchasing  powers 
between staff working in different duty stations is maintained. 

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1.6. 

Duration and financial impact  

(cid:58) Proposal/initiative of unlimited duration 

–  Implementation with a start-up period from 1 January 2012, 

–  followed by full-scale operation. 

1.7.  Management mode(s) envisaged4  

(cid:58) Centralised direct management by the Commission: PMO. 

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Details  of  management  modes  and  references  to  the  Financial  Regulation  may  be  found  on  the 
BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html 

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2. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

2.1. 

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget  line(s) 
affected  

•  Existing expenditure budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of  
expenditure

Contribution  

Number  
[Description………………………...……….] 

Diff./non-
diff 
(5) 

from 
EFTA6 
countries 

from 
candidate 
countries7 

from third 
countries 

within the meaning 
of Article 18(1)(aa) 
of the Financial 
Regulation  

XX.01.01.01 

non-diff. 

NO 

NO 

NO 

NO 

Heading of 
multiannual 
financial 
framework 

5 
6 
7 

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Diff. = Differentiated appropriations / Non-Diff. = Non-differentiated appropriations 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidate countries from the Western Balkans. 

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Number  XX.01.01.01 and Chapter 11, Chapter 42 Expenditure Relating to Parliamentary Assistants 

Year 
N8 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

TOTAL 

2.2. 

Estimated impact on expenditure  

2.2.1. 

Summary of estimated impact on expenditure  

EUR million (to 3 decimal places) 

Heading of multiannual financial 
framework:  

DG: HR 

(cid:121) Operational appropriations  

Number of budget line 

Number of budget line 

of 

Appropriations 
administrative 
from the envelope for specific programmes9  
Number of budget line 

an 

TOTAL appropriations 
for DG HR 

Commitments 

Payments 

Commitments 

Payments 

(1) 

(2) 

(1a) 

(2a) 

nature 

financed 

Commitments 

Payments 

(3) 

=1+1a 
+3 

=2+2a 

+3 

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Year N is the year in which implementation of the proposal/initiative starts. 
Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former "BA" lines), indirect research, direct 
research. 

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(cid:121) TOTAL operational appropriations  

Commitments 

Payments 

(cid:121)  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelope for specific programmes  

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADING <….> 
of the multiannual financial framework 

Commitments 

=4+ 6 

Payments 

=5+ 6 

If more than one heading is affected by the proposal / initiative: 

(cid:121) TOTAL operational appropriations  

Commitments 

Payments 

(cid:121)  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelope for specific programmes  

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADINGS 1 to 4 
of the multiannual financial framework 
(Reference amount) 

Commitments 

=4+ 6 

Payments 

=5+ 6 

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Heading of multiannual financial 
framework:  

5 

" Administrative expenditure " 

EUR million (to 3 decimal places) 

Year 
2012 

Year 
2013 

Year 
2014 

Year 
2015 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6)  

TOTAL 

DG: <…….> 

(cid:121) Human resources  
(cid:121) Other administrative expenditure  

TOTAL DG  

Appropriations  

TOTAL appropriations 
under HEADING 5 
of the multiannual financial framework  

(Total 
= Total payments) 

commitments 

-0,002 

-0,002 

-0,002 

-0,002 

-0,002 

-0,002 

-0,002 

not available 

Year 
2012 

Year 
2013 

Year 
2014 

Year 
2015 

… enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

TOTAL 

EUR million (to 3 decimal places) 

TOTAL appropriations  
under HEADINGS 1 to 5 
of the multiannual financial framework  

Commitments 

-0,002 

-0,002 

-0,002 

-0,002 

-0,002 

-0,002 

-0,002 

not available 

Payments 

-0,002 

-0,002 

-0,002 

-0,002 

-0,002 

-0,002 

-0,002 

not available 

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2.2.2.  Estimated impact on operational appropriations  

–  (cid:58)  The proposal/initiative does not require the use of operational appropriations  

2.2.3.  Estimated impact on appropriations of an administrative nature 

2.2.3.1.  Summary  

–  (cid:133)  The  proposal/initiative  does  not 

require 

the  use  of  administrative 

appropriations  

–  (cid:133)  The  proposal/initiative  requires  the  use  of  administrative  appropriations,  as 

explained below: 

EUR million (to 3 decimal places) 

Year 
N 10 

Year 
N+1 

Year 
N+2 

Year 
N+3 

… enter as many years as necessary 
to show the duration of the impact 
(see point 1.6) 

TOTAL 

HEADING 5 
of the multiannual 
financial framework 

Human resources  

Other administrative 
expenditure  

Subtotal HEADING 5 
of the multiannual 
financial framework  

Outside HEADING 511 
of the multiannual 
financial framework  

Human resources  

Other expenditure  
of an administrative 
nature 

Subtotal  
outside HEADING 5 
of the multiannual 
financial framework  

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Year N is the year in which implementation of the proposal/initiative starts. 
Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU 
programmes and/or actions (former "BA" lines), indirect research, direct research. 

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TOTAL 

2.2.3.2.   

2.2.3.3.  Estimated requirements of human resources  

–  (cid:58)  The proposal/initiative does not require the use of human resources  

2.2.4.  Compatibility with the current multiannual financial framework  

–  (cid:58)  The  proposal/initiative  is  compatible  the  current  multiannual  financial 

framework. 

2.2.5.  Third-party contributions  

–  (cid:58) The proposal/initiative does not provide for co-financing by third parties 

2.3. 

Estimated impact on revenue  

–  (cid:58)  Proposal/initiative has no financial impact on revenue. 

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