COMMISSION STAFF WORKING DOCUMENT Eurostat Report on the intermediate adjustment of remuneration and pensions of EU officials and other servants Accompanying the document Proposal for a Council Regulation adjusting the correction coefficients applicable to the remuneration and pension of officials and other servants of the European Union
Date: 2012-05-25
Institutions: European Commission
Subjects: Estonia, European official, Eurostat, cost of living, remuneration of work, servant (EU), wage determination

EUROPEAN COMMISSION 

Brussels, 25.5.2012  
SWD(2012) 134 final 

COMMISSION STAFF WORKING DOCUMENT 

Eurostat Report on the intermediate adjustment of remuneration and pensions of EU 
officials and other servants 

Accompanying the document 

Proposal for a Council Regulation  

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

{COM(2012) 234 final} 

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TABLE OF CONTENTS 

COMMISSION STAFF WORKING DOCUMENT Eurostat Report on the intermediate 
adjustment of remuneration and pensions of EU officials and other servants ........................... 3 

Executive Summary ................................................................................................................... 3 

1.  Introduction ........................................................................................................................... 5 

2.  The Brussels International Index, June-December 2011 ...................................................... 5 

3.  PPP for staff at December 2011 ............................................................................................ 6 

4.  PPP for pensioners at December 2011 .................................................................................. 6 

5.  Global Specific Indicator forecast to July 2012 .................................................................... 6 

6.  Calculation of the intermediate adjustment........................................................................... 7 

Appendix ONE: Brussels International Index............................................................................ 8 

Appendix TWO:  Staff PPPs and Pensioner PPPs ................................................................... 11 

6) 

Reasons for the changes in the aggregate PPPs ......................................................... 19 

Appendix THREE:  Forecast of Global Specific Indicator...................................................... 20 

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COMMISSION STAFF WORKING DOCUMENT 

Eurostat Report on the intermediate adjustment of remuneration and pensions of EU 
officials and other servants 

Accompanying the document 

Proposal for a Council Regulation  

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

EXECUTIVE SUMMARY 

The report presents all the information required for the intermediate adjustment of remuneration and 
pensions in Belgium/Luxembourg and in other places, including: 

- evolution of the purchasing power of national officials (global specific indicator forecast);  

- changes in the cost of living in Brussels (Brussels International Index);  

- correction coefficients for staff and pensioners.  

For the period June 2011 – December 2011 the Brussels International Index (cost of living measured 
for the EU officials) is 101.1 (+1.1%). Details are provided in Appendix One. This does not exceed the 
specified threshold. In consequence, no intermediate adjustment of the nominal net remuneration and 
pension of European officials in Belgium and Luxembourg is required. 

For the period 1.July 2011 – 1.July 2012 the forecast global specific indicator (average change in real 
net remuneration in the sample of 8 countries) is 98.4 (-1.6 %). As this is negative, half of this value 
has to be taken into account, namely -0.8% (99.2). Details are provided in Appendix Three. 

As a consequence of the foregoing, the intermediate adjustment of the nominal net remuneration and 
pension  of  European  officials  outside  Belgium  and  Luxembourg  which  is  necessary  to  maintain  a 
parallel  development  of  purchasing  power  with  the  national  civil  servants  in  the  Member  States  is 
equal to +0.3% (product of 101.1 and 99.2).  

The  correction  coefficients  which  would  apply  to  remuneration  and  pensions  outside  Belgium  and 
Luxembourg  in  order  to  maintain  equality  of  purchasing  power  at  December  2011,  are  provided  in 
Appendix  Two.  The  product  of  the  Brussels  International  Index  and  the  changes  in  the  economic 
parities with Brussels for staff exceeded the specified threshold in only one location, Tallinn-Estonia. 
The movement for pensioners did not exceed the specified threshold in any location. 

The  calculated  correction  coefficient  at  December  2011  for  Tallinn-Estonia  is  77.6  -  the  new 
correction  coefficient  to  be  applied  for  Tallinn,  taking  into  account  the  intermediate  adjustment,  is 
therefore 77.8. 

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All  figures  and  calculations  contained  in  this  report  are  based  on  data  supplied  by  the  responsible 
authorities  in  the  Member  States.  More  information  on  methodology,  detailed  results  and  statistical 
analysis is available in the annexes to this report and detailed procedural manuals. For any information 
concerning this report, please contact Eurostat in Luxembourg: 

European Commission 
Eurostat, Unit C3 
BECH – A2/024, 
L-2920 Luxembourg 
Tel.: (352) 4301-35129 
Email: estat-a64ia65@ec.europa.eu 

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1.  INTRODUCTION 

The  proposed  July  2011  annual  adjustment  to  remuneration  and pensions  was  communicated  by  the 
Commission to the Council on 24th November 20111 on the basis of a report drawn up by Eurostat2, 
together  with  an  additional  report  providing  supplementary  information  on  application  of  the 
Exception Clause3. The Council decision not to adopt this proposal was published on 22nd December4. 
Various claims and counter-claims have been lodged with the the European Court of Justice, however 
the  underlying  figures  have  not  been  contested.  Eurostat  has  prepared  the  current  report  on  the 
presumption that the July 2011 values will eventually apply. 

Under the Staff Regulations, an Intermediate Adjustment is made where the cost of living measured in 
the  reference  city  (ie.  Brussels  International  Index)  or  the  cost  of  living  measured  in  any  individual 
duty  station  (ie.  implicit  index,  being  the  combined  impact  of  the  BII  and  the  change  in  the  local 
purchasing power parity relative to Brussels) exceeds a specified threshold. This threshold is set at 7% 
for the year, interpreted as 3.5% for six months by a decision of the Article 64 Working Group in April 
2005.  It  is  therefore  necessary  to  compute  the  BII  for  the  period  June-December  and  the  Staff  and 
Pensioner PPP at December. This document summarises the result of those calculations. 

The Staff Regulations also provide that if the global specific indicator forecast (the movement in net 
remuneration of national civil servants) is negative, half of this amount has to be taken into account for 
the  intermediate  adjustment  calculation.  It  is  therefore  necessary  to  compile  and  validate  these 
forecasts for the period July-July. This document also summarises those results. 

2.  THE BRUSSELS INTERNATIONAL INDEX, JUNE-DECEMBER 2011 

The  December  2011  index  was  computed  according  to  the  same  standard  methodology  applied  to 
establish the June 2011 value; in the absence of any new Staff Housing Survey amongst EU staff in 
Brussels, the rent sub-index from the HICP was used for the 2 basic headings for rent. The 80 basic 
heading  indices  are  then  aggregated  using  weights  from  the  most  recent  Survey  of  Household 
Expenditure  conducted  amongst  EU  staff  in  Brussels  (ie.  the  same  as  applied  to  produce  the  June 
result), to establish an overall value. 

The variation between the June 2011 figure and the December 2011 figure gives an index of 101.1 (ie. 
+1.1% for the six month period). This BII variation is slightly higher than the HICP movement for the 
same period (100.9), partly due to weight effects and partly due to price effects. Further information 
can be found in Appendix One. 

1 See document COM(2011)820. 
2 See document SEC(2011)1436. 
3 See documents COM(2011)829 and COM(2011)440. 
4 See document OJ L.341/54. 

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3.  PPP FOR STAFF AT DECEMBER 2011 

The  PPP  for  staff  at  December  2011  (ie.  1  January  2012)  were  computed  according  to  the  agreed 
methodology, updating the individual basic heading PPPs established for June 2011 (ie. 1 July 2011) 
using the movement in official HICP between June and December for each duty station relative to the 
movement of the BII for the same period. The results were then aggregated using the weights from the 
most recent Survey of Household Expenditure (ie. the structure applied to produce the June results). 
Note: as there are no new Estate Agency Rent Surveys in December, the same approach (indexation 
using official HICP) is also used to update the basic heading PPP for rents. Further information about 
these PPP can be found in Appendix Two. 

By comparison to the June 2011 values, the simple average change in the duty station PPPs is -0.2%. 
This masks a variation between -1.9% (for CY-Nicosia) and +2.9% (for EE-Tallinn). The PPP change 
for  fourteen  locations  is  negative,  and  for  the  remaining  sixteen  it  is  zero  or  positive.  Brussels  = 
Luxembourg  =  zero.  These  movements  can  be  combined  with  the  BII  to  establish  the  implicit  price 
index. Only one duty station (EE-Tallinn) has an implicit price index which exceeds +/-3.5% for the 
period.  

4.  PPP FOR PENSIONERS AT DECEMBER 2011 

The PPP for pensioners at December 2011 (ie. 1 January 2012) were also computed according to the 
agreed  methodology,  taking  the  updated  individual  basic  heading  PPPs  established  for  Staff  at 
December 2011 (ie. 1 January 2012), and applying the same adjustment to convert rents from capital 
city  price  level  to  national  average  price  level  as  was  used  for  the  June  2011  (ie.  1  July  2011) 
calculation. The updated parities are then aggregated using the weights from the most recent Survey of 
Household  Expenditure  amongst  pensioners  (ie.  the  structure  applied  to  produce  the  June  results). 
Further information about these PPP can be found in Appendix Two. 

By comparison to the June 2011 values, the simple average change in the PPP is -0.4%. This masks a 
variation  between  -2.0%  (for  CY-Nicosia)  and  +1.3%  (for  EE-Tallinn).  The  PPP  change  for  sixteen 
countries is negative, and for the remaining nine it is zero or positive. Belgium = Luxembourg = zero. 
These movements can be combined with the BII to establish the implicit price index. No member state 
has an implicit price index which exceeds +/-3.5% for the period.  

5.  GLOBAL SPECIFIC INDICATOR FORECAST TO JULY 2012 

A  preliminary  estimate  of  the  forecast  was  presented  at  the  Article  65  Working  Group  meeting  in 
March  2012.  The  value  of  the  forecast  was  finalised  shortly  thereafter  to  be  -1.6%  (98.4).  Further 
information can be found in Appendix Three. 

As  this  forecast  is  negative,  half  of  the  value  has  to  be  taken  into  account  for  the  intermediate 
adjustment, ie. -0.8% (99.2). 

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6.  CALCULATION OF THE INTERMEDIATE ADJUSTMENT 

For the period July 2011 – July 2012, the forecast Global Specific Indicator (GDP-weighted average 
of the change in real terms of the net remuneration of national civil servants in central government for 
each country in the sample of 8) is  -1.6% (ie. 98.4). Half of this value has to be taken into account, 
namely -0.8% (ie. 99.2). 

Over the period June 2011 to December 2011, the Brussels International Index (cost of living for EU 
officials) was  +1.1% (ie. 101.1). This does not exceed the threshold. 

Therefore, the intermediate adjustment of nominal net remuneration of EU officials outside Belgium 
and Luxembourg necessary to maintain parallel development of purchasing power5, is  +0.3%. 

99.2  x  101.1  =  100.3 

For  staff,  changes  in  the  cost  of  living  (measured  by  implicit  indices  which  are  calculated  as  the 
product  of  the  Brussels  International  Index  and  the  changes  in  the  economic  parities  with  Brussels) 
exceeded the threshold only in one location (Tallinn-Estonia).  

The  correction  coefficient  calculated  for  Tallinn-Estonia  at  December  2011  (ie.  1  January  2012)  is 
77.6  -  applying  the  intermediate  adjustment,  the  new  correction  coefficient  for  Tallinn-Estonia 
therefore becomes 77.8. 

For pensioners, the implicit index did not exceed the threshold for any country.  

5 Before taking any change in the pension contribution rate and/or the special levy into account. 

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APPENDIX ONE: BRUSSELS INTERNATIONAL INDEX 

1)  CALCULATION OF THE BRUSSELS INTERNATIONAL INDEX 

For  the  intermediate  adjustment,  the  same  methodology  is  applied  as  for  the  annual  adjustment. 
However,  as  the  Brussels  Staff  Housing  Survey  is  only  conducted  annually,  there  is  no  fresh 
information about accommodation rental costs, and the relevant sub-index of the Belgian HICP is used 
instead. 

Thus,  for  71  of  the  80  basic  headings:  the  relevant  sub-index  of  the  Belgian  harmonised  index  of 
consumer prices (HICP) is used.  

For 9 basic headings, where the specific price evolution in Brussels is considered to differ significantly 
from  the  situation  for  the  country  as  a  whole,  the  relevant  sub-index  from  the  Brussels-specific 
national consumer price index is used.  

This information is provided by the "Service public fédéral, Economie, P.M.E., Classes moyennes et 
Energie,  division  des  prix"  (Federal  Public  Service  of  Belgium,  Economy,  Small  and  medium-sized 
enterprises, Middle classes and Energy, Price indices department).  

The  basic  headings  concerned  are:  Water  supply;    Electricity;    Gas;    Other  services  in  respect  of 
personal  transport  equipment;    Passenger  transport  by  road;    Combined  passenger  transport;  
Restaurants, cafes and the like;  Accommodation services;  Hairdressing salons and personal grooming 
establishments 

These  80  price  indices  are  then  aggregated  using  weights  derived  from  the  latest  of  the  periodic 
"Survey of Household Expenditures" conducted amongst EU staff in Brussels (2009). 

2)  BRUSSELS INTERNATIONAL INDEX, JUNE 2011-DECEMBER 2011 

The  following  table  presents  the  index  values  for  December  2011  with  comparative  information  for 
June  2011,  base  2005  =100.  The  variation  between  these  two  indices  is  the  Brussels  International 
Index  applicable  for  the  current  exercise  (six  months)  in  the  context  of  the  intermediate  adjustment. 
The overall index value for the period is +1.1%. 

Brussels International Index, 2005=100
SHE weights 2009
Rents from HICP

1

2

3

4

5

6

7

8

9

FOOD AND NON-ALCOHOLIC  BEVERAGES

ALCOHOLIC BEVERAGES AND TOBACCO

CLOTHING AND FOOTWEAR

HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS

FURNISHINGS, HOUSEHOLD EQUIPMENT AND  MAINTENANCE OF HOUSE

HEALTH

TRANSPORT

COMMUNICATIONS

RECREATION AND CULTURE

10

EDUCATION 

11 HOTELS, CAFES AND RESTAURANTS

12 MISCELLANEOUS GOODS AND SERVICES

TOTAL WITH OUT RENTS

RENTS

TOTAL

3)  BELGIAN HICP 

SHE
WEIGHTS
128.2
20.3
54.3
297.6
74.7
19.2
127.2
21.5
91.7
14.7
100.6
50.0
762.9
237.1
1000.0

INDICES
Jun-2011
119.5
112.2
109.5
109.0
111.1
101.3
111.2
91.3
100.9
111.7
119.9
119.6
114.8
100.0
111.3

INDICES
Dec-2011
121.3
112.1
111.1
110.1
112.0
101.4
112.7
90.3
101.3
115.1
121.5
121.5
116.3
100.3
112.5

VARIATION
101.5
99.9
101.4
101.0
100.8
100.1
101.4
98.9
100.4
103.0
101.4
101.6
101.3
100.3
101.1

The following table presents the published HICP values for June 2010 and December 2010, base 2005 
= 100, and the right-hand column again shows the variation for the period, +1.1%. 

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Belgian HICP index, 2005=100
HICP weights
Rents from HICP

1

2

3

4

5

6

7

8

9

FOOD AND NON-ALCOHOLIC BEVERAGES

ALCOHOLIC BEVERAGES AND TOBACCO

CLOTHING AND FOOTWEAR

HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS

FURNISHINGS, HOUSEHOLD EQUIPMENT AND MAINTENANCE OF HOUSE

HEALTH

TRANSPORT

COMMUNICATIONS

RECREATION AND CULTURE

10

EDUCATION 

11 HOTELS, CAFES AND RESTAURANTS

12 MISCELLANEOUS GOODS AND SERVICES

TOTAL WITHOUT RENTS

RENTS

TOTAL

WEIGHTS
from HICP 2011
171.9
46.8
59.8
140.9
72.4
36.9
147.1

INDICES
01/06/2011
119.4
116.0
108.7
131.3
111.5
101.3
118.2

WEIGHTS
from HICP 2011
171.9
46.8
59.8
140.9
72.4
36.9
147.1

29.3
113.6
6.4
83.1
91.8
952.9
47.1
1000.0

90.8
106.3
111.7
118.0
117.1
116.0
110.3
115.7

29.3
113.6
6.4
83.1
91.8
952.9
47.1
1000.0

INDICES
01/12/2011
121.0
116.2
110.3
133.0
112.9
101.4
118.9

89.8
106.8
115.1
118.7
118.6
117.1
110.7
116.8

VARIATION
101.4
100.1
101.5
101.3
101.3
100.1
100.6

98.9
100.5
103.0
100.6
101.3
100.9
100.3
100.9

Overall, the BII for this period (101.1) is 0.2 points higher than the HICP (100.9).  

4)  BRUSSELS INTERNATIONAL INDEX, COMPARED WITH BELGIAN HICP 

By comparing the results at the level of the 12 main COICOP groups, reasons for the difference in the 
value of the overall index can be identified. The table below summarises the principal differences. 

The first column and the penultimate column are taken from the tables in sections 2 and 3. The final 
column shows the total difference. The second and fourth columns show the components of the total 
difference. 

Note:  in  this  analysis,  the  impact  of  differing  numbers  of  underlying  basic  headings  and  different 
aggregation approaches is not considered. 

Variation between Brussels International Index, 2005=100 and Belgian HICP index, 2005=100
BII uses SHE weights 2009 and HICP uses HICP weights
BII uses Rents from HICP
Period 2011m6 to 2011m12

1

2

3

4

5

6

7

8

9

FOOD AND NON-ALCOHOLIC BEVERAGES

ALCOHOLIC BEVERAGES AND TOBACCO

CLOTHING AND FOOTWEAR

HOUSING, WATER, ELECTRICITY, GAS AND OTHER FU ELS

FURN ISH INGS, HOUSEHOLD  EQUIPMENT AND  MAINTENANCE OF HOUSE

HEALTH

TRANSPORT

COMMUNICATIONS

RECREATION AND CULTURE

10

EDUCATION 

11 HOTELS, CAFES AND RESTAURANTS

12 MISCELLANEOUS GOODS AND SERVICES

TOTAL WITHOUT RENTS

RENTS

TOTAL

5)  BRUSSELS CPI 

HICP Indices
Variation
101.4
100.1

Impact of
new
Weights
0.1
-0.2

HICP Prices
BII Weights
101.5
99.9

Impact of
new Prices
0.0
0.0

101.5
101.3

101.3
100.1
100.6
98.9
100.5

103.0
100.6

101.3
100.9

100.3
100.9

-0.1
-0.4

-0.5
0.0
0.8
0.0
-0.1

0.0
0.7

0.4
0.4

0.0
0.2

101.4
100.9

100.8
100.1
101.4
98.9
100.4

103.0
101.3

101.7
101.3

100.3
101.1

0.0
0.1

0.0
0.0
0.0
0.0
0.0

0.0
0.1

-0.1
0.0

0.0
0.0

BII
Variation
101.5
99.9

total
Variation
HICP to BII
0.1
-0.2

101.4
101.0

100.8
100.1
101.4
98.9
100.4

103.0
101.4

101.6
101.3

100.3
101.1

-0.1
-0.3

-0.5
0.0
0.8
0.0
-0.1

0.0
0.8

0.3
0.4

0.0
0.2

The following table presents the Brussels CPI values for June 2011 and December 2011, base 2005 = 
100, and the right-hand column again shows the variation for the period, +0.8%. 

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Brussels CPI, 2005=100
CPI weights
Rents from CPI

1

2

3

4

5

6

7

8

9

FOOD AND NON-ALCOHOLIC BEVERAGES

ALCOHOLIC BEVERAGES AND TOBACCO

CLOTHING AND FOOTWEAR

HOUSING, WATER, ELECTRICITY, GAS AND OTHER FUELS

FURNISHINGS, HOUSEHOLD EQUIPMENT AND MAINTENANCE OF HOUSE

HEALTH

TRANSPORT

COMMUNICATIONS

RECREATION AND CULTURE

10

EDUCATION 

11 HOTELS, CAFES AND RESTAURANTS

12 MISCELLANEOUS GOODS AND SERVICES

TOTAL WITHOUT RENTS

RENTS

TOTAL

WEIGHTS
from CPI 2011
175.1
21.2
62.8
158.1
73.4
42.8
157.3

INDICES
01/06/2011
122.1
112.7
107.4
127.0
111.0
100.6
114.1

WEIGHTS
from CPI 2011
175.1
21.2
62.8
158.1
73.4
42.8
157.3

36.9
125.2
5.8
70.8
70.7
937.2
62.8
1000.0

89.8
108.8
115.8
122.4
117.0
116.1
107.7
115.5

36.9
125.2
5.8
70.8
70.7
937.2
62.8
1000.0

INDICES
01/12/2011
123.6
112.7
109.3
128.2
111.8
100.7
114.4

88.9
110.2
116.7
123.5
118.1
117.1
108.0
116.5

VARIATION
101.2
100.0
101.8
100.9
100.7
100.0
100.3

99.1
101.2
100.8
100.9
100.9
100.9
100.3
100.8

Overall, the BII for this period (101.1) is 0.3 points higher than the Brussels CPI (100.8).  

The  CPI  aggregates  use  national  source  data  rebased  from  2004  to  2005  and  reformatted  to  match 
HICP and BII. 

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APPENDIX TWO:  STAFF PPPS AND PENSIONER PPPS 

1)   CALCULATION OF CORRECTION COEFFICIENTS 

The correction coefficients (CC) applicable to the salaries of the European institution officials working 
in the capitals and places of employment other than Brussels and Luxembourg are determined on the 
basis of the relationships between the economic parities (PPP) and the exchange rates for the month of 
July. The correction coefficient operates as a percentage adjustment to remuneration to take account of 
the cost of living differences between Brussels and the various duty stations.  

For pensioners, a similar principle applies. The difference is that instead of being based on capital city 
price comparisons they relate to national comparisons, with Belgium as the base country. 

2)   STEPS TO PRODUCE PPPS FOR INTERMEDIATE ADJUSTMENT 

2.A)   STAFF PPPS 

The  object  of  the  economic  parities  is  to  compare  the  relative  costs  of  living  of  EU  officials  in 
Brussels (reference city) with each of the European capitals and other places of employment for which 
a correction coefficient has been set. The method used is to compare the price of a "basket" of goods 
and services in Brussels with the prices of the same goods and services in each of the other places of 
employment.  The  weighted  average  of  all  the  price  ratios  is  the  "economic  parity".  The  average 
consumption expenditure pattern of EU officials are used as weights, identified by means of periodic 
surveys of household expenditure. In places of employment outside Brussels with very few officials, a 
common structure pooling all the questionnaires from similar locations is derived instead. 

The starting point is the parities for the 80 basic headings, as established for the annual adjustment of 
the year in question (ie. 1st July 2011).  

For  each  duty  station,  the  individual  basic  heading  parities  are  then  updated  using  the  movement  in 
official HICP between June and December, relative to the movement of the BII for the same period. 

Note  that  there  is  no  new  Staff  Housing  Survey  in  Brussels  in  December,  so  the  BII  movement  for 
rents is the same as the Belgian HICP movement for rents. 

Note:  the  same  approach  (indexation  using  official  HICP)  is  also  applied  for  the  basic  headings 
relating  to  rents,  rather  than  calculation  of  a  new  parity,  as  there  are  no  new  Estate  Agency  Rents 
Surveys in Brussels or the various duty stations.  

Finally,  the  updated  basic  heading  parities  are  aggregated  using  the  same  expenditure  weighting 
structure as was used to establish the 1st July overall parity. 

2.B)   PENSIONER PPPS 

In line with the decision at the 2008 meeting of the Article 64 Group, the approach to calculate PPPs 
for Pensioners for the Intermediate Adjustment is the same as the approach to establish those for the 
Annual Adjustment.  

In  this  case,  the  parities  for  all  basic  headings,  except  rents,  are  set  equal  to  the  updated  parities 
established for Staff. A specific adjustment is then made to rent parities to convert them from capital 
city  price  level  to  national  average  price  level.  The  same  adjustment  factor  is  applied  for  the 
intermediate adjustment as was applied for the July calculation. 

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The updated parities for all basic headings are then aggregated using consumption expenditure weights 
derived from the wide scale Family Budget Survey amongst pensioners which was last conducted in 
2002. 

3)   CALCULATED VALUES AT JANUARY 2012 

3.A)   STAFF PPPS 

The  following  Table  3.A  presents  the  calculated  values  of  the  economic  parities  and  correction 
coefficients for staff as at  1st January 2012 (ie. December 2011), ranked by magnitude of correction 
coefficient  value.  Exchange  rates  for  1st  July  2011  are  used,  for  consistency  with  the  Annual 
Adjustment. 

Ten  locations  have  a  correction  coefficient  higher than  100;  the  remaining  twenty  have  a  correction 
coefficient equal to or below 100. Brussels = Luxembourg = 100. 

3.B)   PENSIONER PPPS 

Similarly,  the  following  Table  3.B  presents  the  calculated  values  of  the  economic  parities  and 
correction  coefficients  for  pensioners  as  at  1st  January,  ranked  by  magnitude.  Exchange  rates  for  1st 
July are used. 

Eight  locations  have  a  CC  greater  than  100;  the  remaining  seventeen  have  a  coefficient  equal  to  or 
below 100. Belgium = Luxembourg = 100. 

EN 

12 

   EN 

 
TABLE 3.A 

STAFF 

RANKED BY MAGNITUDE OF CC

01-Jan-12

Final

Ex. Rate

CC

BG  Sofia

LT  Vilnius

RO  Bucharest

LV  Riga

EE  Tallinn

SK  Bratislava

PL  Warsaw

CY  Nicosia

MT  Valletta

PPP

1.19

2.473

3.062

0.528

0.776

0.783

3.232

0.816

0.82

HU  Budapest

221.577

PT  Lisbon

SI  Ljubljana

0.835

0.850

1.956

3

4.211

1

1

1

4

1

1.00

267

1

1

CZ  Prague

20.778

24.342

EL  Athens

IT  Varese

DE  Karlsruhe

DE  Bonn

DE  Berlin

ES  Madrid

UK  Culham

NL  The Hague

DE  Munich

IT  Rome

AT  Vienna

IE  Dublin

FR  Paris

FI  Helsinki

0.915

0.921

0.927

0.935

0.942

0.970

0.891

1.012

1.037

1.050

1.1

1.081

1.168

1.198

SE  Stockholm

11.350

UK  London

1.163

DK  Copenhagen

9.95

1

1

1

1

1

1

0.900

1

1

1

1.0

1

1.000

1.000

9.205

0.900

7.459

60.7  

71.6  

72.7  

74.5  

77.6  

78.3  

80.8  

81.6  

81.9  

83.0  

83.5  

85.0  

85.4  

91.5  

92.1  

92.7  

93.5  

94.2  

97.0  

99.1  

101.2  

103.7  

105.0  

105.0  

108.1  

116.8  

119.8  

123.3  

129.3  

133.4  

EN 

13 

   EN 

 
 
 
 
 
 
 
TABLE 3.B 

  PENSIONERS 

Ranked by magnitude of CC

19.248

24.34

01-Jan-12

Final

Ex. Rate

 CC

1.956

4.211

0.709

3.453

3.999

267.1

1

1

1

1

1

1

1

1

1

1

1

1

1

58.3  

62.1  

69.6  

69.9  

71.4  

72.8  

73.1  

78.4  

79.1  

82.5  

83.2  

83.3  

83.7  

90.2  

91.4  

96.1  

96.5  

100.5  

103.5  

104.1  

PPP

1.140

2.616

0.494

2.414

2.855

194.457

0.731

0.784

0.825

0.832

0.833

0.837

0.902

0.914

0.961

0.965

1.005

1.035

1.041

0.939

1.091

1.125

BG

RO

LV

LT

PL

HU

SK

EE

CZ

SI

MT

PT

CY

EL

ES

NL

DE

IT

IE

AT

UK

FR

FI

SE

DK

0.900

104.3  

1

1

109.1  

112.5  

10.750

9.205

116.8  

9.692

7.459

129.9  

EN 

14 

   EN 

 
 
 
 
 
4)   COMPARISON OF STAFF CC WITH PENSIONER CC 

The following table compares calculated correction coefficients at 1st January 2012 for pensioners and 
staff.  Some  quite  large  differences  are  apparent  for  rents;  the  difference  is  smaller  when  rents  are 
excluded. The variations are due to the rent price adjustment to produce pensioner PPPs and to the use 
of a different weighting structure for pensioners. 

INTERMEDIATE ADJUSTMENT :
Jan 2012
pensioner CCs compared to staff CCs

Correction coefficients for pensioners

Correction coefficients for staff

Country

BE

BG

CZ

DK

DE

EE

EL

ES

FR

IE

IT

CY

LV

LT

HU

MT

NL

AT

PL

PT

RO

SI

SK

FI

SE

UK

without 
rent

100.0

63.7

78.9

128.8

95.0

76.8

88.8

89.8

103.7

100.2

96.6

86.1

70.7

69.9

73.1

83.2

95.3

98.9

72.7

85.9

63.7

83.0

75.0

110.4

112.3

93.6

rents

100.0

24.1

81.2

136.7

106.5

95.2

100.7

103.1

148.2

124.1

129.0

67.5

59.3

70.9

71.8

84.0

100.8

141.7

59.9

67.4

49.2

79.1

56.4

126.3

148.5

182.0

Total

Capital

without 
rent

100.0

Brussels

100.0

58.3

79.1

 Sofia

 Prague

61.5

76.4

129.9

 Copenhagen

125.9

96.5

78.4

90.2

91.4

109.1

103.5

100.5

83.7

69.6

69.9

72.8

83.2

96.1

 Berlin

 Tallinn

 Athens

 Madrid

 Paris

 Dublin

 Rome

 Nicosia

 Riga

 Vilnius

 Budapest

 Vallette

The Hague

104.1

 Vienna

71.4

83.3

62.1

82.5

73.1

 Warsaw

 Lisbon

 Bucharest

 Ljubljana

 Bratislava

94.1

75.2

89.2

88.6

102.4

102.1

95.2

87.8

70.2

68.0

72.2

83.5

93.8

97.2

71.6

84.7

62.4

81.4

74.1

112.5

 Helsinki

110.4

116.8

 Stockholm

112.8

104.3

 London

95.7

rents

100.0

57.9

119.2

156.2

94.7

86.6

102.9

133.8

177.5

134.4

150.5

62.1

90.0

84.8

125.9

76.5

133.0

131.8

118.6

79.7

117.2

97.3

93.4

151.2

160.9

280.7

Total

100.0

60.7

85.4

133.4

94.2

77.6

91.5

97.0

116.8

108.1

105.0

81.6

74.5

71.6

83.0

81.9

101.2

105.0

80.8

83.5

72.7

85.0

78.3

119.8

123.3

129.3

EN 

15 

   EN 

 
 
 
 
5)   CHANGES IN THE AGGREGATE PPPS 

5.A)   STAFF PPPS 

The following Table 5.A shows the changes in the economic parities for staff by comparison to those 
established  for  1st  July  2011,  and  the  associated  implicit  price  index  (which  also  takes  BII  into 
account).  

The simple average change in the PPP relative to Brussels is -0.2%. This masks a variation between -
1.6%  (CY-Nicosia)  and  +2.9%  (EE-Tallinn).  The  PPP  'evolution'  for  fourteen  locations  is  negative, 
and for the remaining sixteen it is zero or positive. Brussels = Luxembourg = zero. 

Only one duty station (EE-Tallinn) has an implicit price index which exceeds ±3.5% for the six 
months (+4.1%). 

5.B)   PENSIONER PPPS 

The following Table 5.B shows the changes in the economic parities for pensioners by comparison to 
those  established  for  1st  July,  and  the  associated  implicit  price  index  (which  also  takes  BII  into 
account).  

The simple average change in the PPP relative to Brussels is -0.4%. This masks a variation between -
2.0%  (CY)  and  +1.3%  (EE).  The  PPP  'evolution'  for  sixteen  locations  is  negative,  and  for  the 
remaining nine it is zero or positive. Belgium = Luxembourg = zero. 

No country has an implicit price index which exceeds ±3.5% for the six months. 

EN 

16 

   EN 

 
TABLE 5.A 

STAFF 

01-Jul-11

01-Jan-12

Final

Final

BG  Sofia

CZ  Prague

PPP

1.186

20.74

DK  Copenhagen

10.009

DE  Berlin

DE  Bonn

DE  Karlsruhe

DE  Munich

EE  Tallinn

EL  Athens

ES  Madrid

FR  Paris

IE  Dublin

IT  Rome

IT  Varese

CY  Nicosia

LV  Riga

LT  Vilnius

HU  Budapest

MT  Valletta

NL  The Hague

AT  Vienna

PL  Warsaw

PT  Lisbon

RO  Bucharest

SI  Ljubljana

SK  Bratislava

FI  Helsinki

SE  Stockholm

UK  London

UK  Culham

0.937

0.930

0.922

1.032

0.754

0.922

0.974

1.164

1.096

1.048

0.919

0.830

0.528

2.511

222.9

0.827

1.028

1.050

3.220

0.840

3.060

0.862

0.788

1.205

11.42

1.152

0.883

PPP

Change

Implicit

1.187

20.78

9.947

0.942

0.935

0.927

1.037

0.776

0.915

0.970

1.168

1.081

1.050

0.921

0.816

0.528

2.473

221.6

0.819

1.012

1.050

3.232

0.835

3.062

0.850

0.783

1.198

11.35

1.163

0.891

0.1  

0.2  

-0.6  

0.5  

0.5  

0.5  

0.5  

2.9  

-0.7  

-0.4  

0.3  

-1.4  

0.2  

0.2  

-1.6  

0.1  

-1.5  

-0.6  

-1.0  

-1.5  

0.1  

0.4  

-0.6  

0.1  

-1.4  

-0.7  

-0.5  

-0.7  

1.0  

0.9  

1.2

1.3

0.5

1.6

1.6

1.6

1.6

4.1

0.3

0.7

1.4

-0.3

1.3

1.3

-0.6

1.2

-0.4

0.5

0.1

-0.4

1.2

1.5

0.5

1.2

-0.3

0.3

0.5

0.4

2.1

2.0

simple average change 

-0.2  

EN 

17 

   EN 

 
 
 
 
 
 
TABLE 5.B 

PENSIONERS 

01-Jul-11

01-Jan-12

Final

PPP

1.137

Final

PPP

1.140

19.311

19.248

9.732

0.954

0.774

0.910

0.915

1.085

1.046

1.000

0.854

0.498

2.441

9.692

0.965

0.784

0.902

0.914

1.091

1.035

1.005

0.837

0.494

2.414

195.219

194.457

0.846

0.973

1.041

2.853

0.839

2.614

0.836

0.735

1.130

10.786

0.931

0.832

0.961

1.041

2.855

0.833

2.616

0.825

0.731

1.125

10.750

0.939

BG

CZ

DK

DE

EE

EL

ES

FR

IE

IT

CY

LV

LT

HU

MT

NL

AT

PL

PT

RO

SI

SK

FI

SE

UK

Change

Implicit

0.2  

-0.3  

-0.4  

1.2  

1.3  

-0.8  

-0.2  

0.5  

-1.1  

0.5  

-2.0  

-0.8  

-1.1  

-0.4  

-1.6  

-1.3  

0.0  

0.0  

-0.8  

0.1  

-1.4  

-0.5  

-0.5  

-0.3  

0.8  

1.3

0.8

0.7

2.3

2.5

0.3

0.9

1.6

0.0

1.6

-1.0

0.3

0.0

0.7

-0.5

-0.2

1.1

1.1

0.3

1.2

-0.3

0.6

0.6

0.8

1.9

simple average change

-0.4  

EN 

18 

   EN 

 
 
 
 
 
6)  REASONS FOR THE CHANGES IN THE AGGREGATE PPPS 

Changes in the PPPs for 1st January 2012, by comparison to those for 1st July 2011, can solely arise 
from indexation. There has been no new price data introduced, no new weighting data and no change 
in methodology.  

However, it is important to note that the updating is done at basic heading level, and then aggregated. 
The  expenditure  patterns  of  EU  officials/EU  pensioners  (used  to  establish  the  aggregate  PPPs) 
typically differ from the expenditure patterns of national population (used to aggregate the HICP sub-
indices).  For  this  reason  alone,  there  may  be  a  difference  in  the  change  in  the  overall  PPP  and  the 
evolution of the all-items HICP. 

It is also important to remember that it is the movement relative to Brussels which is important. Local 
prices  may  well  have  changed…but  prices  in  Brussels  may  have  changed  too,  and  by  a  different 
amount. 

Various private sector and public sector organisations produce their own cost of living comparisons. 
Methodological  differences  –  for  example  in  the  quantity  and  quality  of  price  information,  in  the 
pertinence  of  weightings  data  and  the  agreed  calculation  formulae,  in  the  reference  basis,  in  the 
validation process – explain why the official statistics produced for EU purposes by Eurostat represent 
a  'gold  standard'  which  may  not  necessarily  indicate  similar  levels  or  follow  similar  trends  to  those 
other reported figures. 

EN 

19 

   EN 

 
 
APPENDIX THREE:  FORECAST OF GLOBAL SPECIFIC INDICATOR 

1)   STEPS TO PRODUCE GSI FORECAST 

Article 1.4 of the Annex XI says that to establish a global specific indicator for the European Union, 
Eurostat shall use a sample composed of the following 8 Member States: Belgium, Germany, Spain, 
France, Italy, Luxembourg, the Netherlands and the United Kingdom. 

For  the  intermediate  adjustment,  data  is  compiled  from  the  above  mentioned  eight  Member  States 
about  the  expected  changes  in  net  remuneration  in  nominal  terms,  between  1.July  2011  and  1.July 
2012. 

National  estimates  of  expected  changes  in  the  harmonized  consumer  price  indices  (inflation  rates) 
during  the  period  June  2011  to  June  2012  have  been  used  to  transform  nominal  changes  in  the 
remunerations  into  movements  in  real  terms.  Where  these  are  not  available,  Eurostat  or  DG  ECFIN 
estimates are used instead. 

In order to get the global specific indicator the results per country have been weighted in proportion to 
their  national  GDP  for  the  year  2010  expressed  in  purchasing  power  parities  (ie.  latest  data  for  the 
same reference weights as were used for the most recent annual adjustment exercise).  

A  preliminary  estimate  of  the  forecast  was  presented  at  the  Article  65  Working  Group  meeting  in 
March  2012.  Following  bilateral  confirmation  of  data  with  Member  States,  the  value  of  the  global 
specific indicator forecast was finalised shortly thereafter. 

The forecast global specific indicator (average change in real net remuneration) for the year to 1.July 
2012 is 98.4 (-1.6%).  

EN 

20 

   EN 

 
 
2)   RESULTS TABLE (VALUES AFTER 23.3.2012 MEETING OF ARTICLE 65 WORKING GROUP) 

EN 

21 

   EN 

 
E
N

2
2

E
N

Forecast of real changes in the remuneration of national civil servants

 in the twelve-month period to 1st July 2012 : Single and married officials with two children

Specific Indicator (1)

Country

Nominal change 
net remuneration

Change in
HICP (3)

Real change 
net remuneration

Weight (2)

Effect on 
the total

BE

DE

ES

FR

IT

LU

NL

UK

Global

(%)

1.0

1.6

-1.6

1.3

0.0

3.2

-1.4

1.4

0.7

(%)

2.6

1.8

1.9

1.5

3.4

3.3

2.9

2.8

2.3

(%)

-1.6

-0.2

-3.4

-0.2

-3.3

-0.1

-4.2

-1.4

-1.6

EU27=100

EU8=100

2.6

19.2

9.2

13.9

12.1

0.3

4.4

13.9

75.6

3.4

25.4

12.2

18.4

16.0

0.4

5.8

18.4

100.0

(1) The figures presented in this table are Eurostat estimates based on information supplied by country delegates and

 other sources and do not prejudice the outcomes of any current or future pay negotiations

(2) GDP 2010 in PPS at current prices (website enquiry 21.02.2012)

(3) all-items HICP (MS estimate, except ES, IT, LU: 2012M02 per website enquiry 20.03.2012)

THUS

Int.Adj =

101.1

( BII )   x   ( 50% GSI if -ve )

99.2

6 months BII.  

THUS

Ann.Adj =
forecast

102.6

( BII )          x         ( GSI )
12 months - BE hicp as proxy

98.4

=

=

-0.05

-0.05

-0.42

-0.03

-0.53

0.00

-0.24

-0.26

-1.58

100.3

100.9

Source of

estimate

email 17.02.2012

email 29.02.2012

email 16.03.2012

email 24.02.2012

edamis 15.03.2012

email 30.03.2012

email 19.03.2012

email 07.03.2012

 
 
 
 
 
 
 
 
 
3)   STEPS TO COMPUTE THE INTERMEDIATE ADJUSTMENT 

Where the intermediate adjustment is not applicable to all duty stations (which will only be the case 
where the cost of living evolution recorded in Brussels is greater than the threshold (ie. six month BII 
exceeds ±3.5%)) then there is no updating of the standard salary grill.  

Instead, the intermediate adjustment has to be applied only to selected duty stations. This is achieved 
by  multiplying  the  correction  coefficients  established  for  intermediate  adjustment  purposes  at  1st 
January (i.e. December) by the product of the BII evolution and half of the GSI forecast (if negative).  

=     CC     x     [  BII     x    ½ GSI (because negative)  ] 

=     ??.?     x     [  ???.?     x     ( 100 – ½ ( 100 – ??.? ) )  ]  /  100 

Thus, for the 2012 exercise,  

=     ??.?     x     [  ???.?     x     ( 100 – ½ ( 100 – 98.4 ) /  100  )  ]  /  100 

=     ??.?     x     [  ???.?     x     ( 100 – ½ ( 1.6 ) /  100  )  ]  /  100 

=     ??.?     x     [  ???.?     x     ( 100 – 0.8 ) /  100  ]  ]  /  100 

=     ??.?     x     [  ???.?     x     ( 99.2  /  100 )  ]  / 100 

EN 

23 

   EN