REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the application of Annex XI to the Staff Regulations and Article 66a thereof
Date: 2018-12-14
Institutions: Directorate-General for Human Resources and Security, European Commission
Subjects: European official, cost of living, pay freeze, pension scheme, posted worker, purchasing power, remuneration of work, servant (EU), staff regulations (EU), wage determination

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 14.12.2018  COM(2018) 830 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the application of Annex XI to the Staff Regulations and Article 66a thereof  
 
 
INTERIM REPORT FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND TO THE COUNCIL  

on the application of Annex XI to the Staff Regulations and Article 66a thereof 

INTRODUCTION 

1. 
Article 15(4) of Annex XI to the Staff Regulations as last amended in 20131 provides that at 
the end of 2018, the Commission shall submit an interim report to the European Parliament 
and the Council on the application of Annex XI and of Article 66a of the Staff Regulations. 

This  interim  report  implements  the  aforementioned  provision  by  describing  the  process  and 
outcome  of  the  implementation  of  the  rules  for  updating  remuneration  and  pensions  under 
Annex  XI  to  the  Staff  Regulations  (hereinafter  the  "Method")  as  well  as  the  solidarity  levy 
under Article 66a for the period 2014-2018. 

BASIC OBJECTIVES AND PRINCIPLES OF THE METHOD ADOPTED IN 2013  

2. 
The provisions2 of the current Method for updating remuneration and pensions were adopted 
as part of the reform of the EU Staff Regulations in 2013. They apply from 1 January 2014 
until at least 31 December 2023.  

The  proper  functioning  of  the  Method  is  based  on  the  two  underlying  principles  that  have 
been reconfirmed in 2013: 

-  The principle of parallelism of the evolution of purchasing power of EU staff and 
national officials in central governments (Article 65 and Annex XI SR); and 

-  The principle of equality of purchasing power among EU staff in different duty 

stations (Article 64 and Annex XI SR). 

2.1.1.  Principle of parallelism 

The principle of parallel development of purchasing power means that the purchasing power 
of  officials  of  the  EU  follows,  both  upwards  and  downwards,  the  evolution  of  the  average 
purchasing power of civil servants in national central government. 

Therefore,  under  Article  65(1)  of  the  Staff  Regulations  the  update  of  remuneration  and 
pensions reflects the annual evolution between 1 July of the previous year and 1 July of the 
current year3 of: 

-  The  real  salaries  of  civil  servants  in  the  central  governments  in  a  sample  of  11 
Member States4 representing at least 75% of the EU Gross Domestic Product. For 
each of these Member States, the yearly change in real salaries is calculated net 

1 Regulation (EU, Euratom) No 1023/2013 of the European Parliament and of the Council of 22 October 2013. 
2 These are mainly Articles 64, 65 and 65a of the Staff Regulations and Annex XI thereto. 
3 The  methodology is based on the  comparison of a  snapshot of a  national remuneration system of a Member 
State in the month of July of the current year with the equivalent snapshot in the same Member State in 
the month of July of the previous year.  

4  Belgium,  Germany,  Spain,  France,  Italy,  Luxembourg,  the  Netherlands,  Austria,  Poland,  Sweden  and  the 

United Kingdom. 

1 

 
 
 
 
 
 
                                                           
of  inflation  and  is  called  the  Specific  Indicator.  The  Global  Specific  Indicator 
(GSI) is the average of all specific indicators weighted by GDP.  

-  The annual inflation in Brussels and Luxembourg (in the same proportion as the 
distribution of the EU staff between the two cities). This element is  called Joint 
Index.  

The GSI and the Joint Index are multiplied to calculate the value of the update. The value of 
the  update  is  expressed  as  a  percentage  that  is  applied  across-the-board  to  the  net 
remuneration and pensions of all EU staff with effect on 1 July5.  

It is in that context important to point out that the Method does not allow "double counting" of 
inflation, but guarantees the parallel evolution of salaries of the EU staff and the national civil 
servants, net of inflation. To this end, the GSI is first calculated net of inflation in the sample 
of 11 Member States, and only as a second step it is combined with the Joint Index.  

Detailed  information  on  the  evolution  of  the  GSI  and  of  the  Joint  Index  is  provided 
respectively in parts 3 and 4. 

2.1.2. 

Specific derogations to the principle of parallelism decided in 2013: the salary freeze 
and the solidarity levy 

The Method was agreed in 2013 as the result of negotiations involving EU institutions, their 
administrations and representatives of their staff.  

In  accordance  with  Article  336  TFEU,  the  ordinary  legislative  procedure  for  amending  the 
Staff  Regulations  involved  the  Commission  with  its  right  of  initiative  and  the  European 
Parliament  and  the  Council  as  co-legislators,  after  consultation  of  the  other  institutions 
concerned  and  their  administrations,  in  particular  the  Court  of  Justice  and  the  Court  of 
Auditors. Prior to the Commission’s proposal, extensive consultation of the representatives of 
staff of all institutions  took  place. During the ordinary  legislative procedure, the Council as 
well implemented its procedure for consultation of staff representatives.  

To take account of the particularly difficult economic and social context in the Union in that 
period and following the conclusions of the European Council adopted in February 2013, as 
part of the reform it was also decided: 

-  That  the  update  of  remuneration  and  pensions  of  all  staff  of  the  Union 
institutions, other bodies and agencies through the Method would be suspended 
in 2013 and 2014 (see part 3.4.1 on the two-year salary freeze), and 

-  That  the  potential  advantages  for  officials  and  other  servants  of  the  European 
Union of the application of the Method would be balanced by the reintroduction 
as of 1 January 2014 of  the system of a solidarity  levy  deducted from  EU staff 
salaries at an increased rate (see part 3.4.2 on the solidarity levy). 

5 To account for substantial changes in the cost of living in Brussels and Luxembourg, an intermediate update 
may take place as of 1 January, in accordance with Articles 4 to 7 of Annex XI to the Staff Regulations. 
The sensitivity threshold referred to in these provisions was not reached in Brussels and Luxembourg 
since the entry into force of the 2013 Method. 

2 

 
 
 
 
 
  
                                                           
2.1.3.  General  derogations  to  the  principle  of  parallelism:  moderation  and  exception 

clauses 

By  derogation  to  the  general  principle  of  parallelism  of  purchasing  power  evolution,  a 
moderation  clause  limits  high  increases  in  purchasing  power  as  well  as  any  high  loss  in 
purchasing  power  for  a  given  year.  If  the  calculated  increase  in  purchasing  power  (GSI) 
exceeds  2%  or  if  the  purchasing  power  decreases  by  more  than  2%,  then  the  change  in 
purchasing  power  for  EU  staff  is  limited  to  2%.  The  part  of  the  gain  or  loss  in  purchasing 
power exceeding 2% is applied nine months later, from 1 April of the following year. 

The  exception  clause  limits  the  gain  in  purchasing  power  of  EU  staff  when  there  is  a 
downturn  in  the  EU  economy.  If  there  is  a  forecast  decrease  in  the  EU  GDP  and  there  is  a 
gain  in  purchasing  power  measured  by  the  specific  indicator,  then  depending  on  the 
magnitude of the GDP decrease,  a part of the  gain  in  purchasing power is postponed to  the 
following year according to the table below: 

Gross Domestic Product 

Consequences in terms of 
split of the global specific 
indicator 

Date of payment of the 
second part 

[-0,1 % ; -1 %] 

33 % ; 67 % 

1 April of year  n + 1 

[-1 % ; -3 %] 

0 %; 100 % 

1 April of year  n + 1 

below -3 % 

0 % 

- 

If the EU GDP decreased by more than 3%, then the gain in the purchasing power due to the 
Method is granted when the EU economy recovers, i.e. when the gross  domestic product of 
the EU reaches the pre-downturn level (recovery clause). 

If the final data delivered by the Commission on the EU GDP is different from the forecast to 
the  extent  that  it  affects  the  consequences  how  the  crisis  clause  was  applied,  then  the 
necessary  corrections,  including  retroactive  adjustments,  either  positive  or  negative,  are 
made6. 

2.1.4.  Principle of equality of purchasing power among EU staff – correction coefficients 

The correction coefficient puts into practice the general principle of equal treatment, which in 
this  particular case  corresponds  to  the equality of purchasing power between all staff of the 
EU institutions, bodies and agencies regardless of their place of employment. 

6 The Working Group on Articles 64 and 65 of the Staff Regulations decided that the "final data" delivered by 
the  Commission  on  the  EU  GDP  for  a  given  year  would  be  interpreted  as  the  data  available  by  30 
September  of  the  following  year.  This  clarification  was  deemed  to  be  necessary  since  GDP  data  can 
often be revised many years after the reference year. 

3 

 
 
 
 
 
                                                           
Whereas the same salary grids and basic amounts apply to all EU staff, correction coefficients 
apply  to  staff  serving  in  posts  outside  Brussels  and  Luxembourg,  who  should  neither  suffer 
financially from higher living costs in their duty stations or benefit from lower living costs. 

Hence  the  correction  coefficient  operates  as  a  percentage  adjustment  to  the  salary  to 
compensate the difference (positive or negative) in the cost of living in each duty station. The 
correction coefficient is applied according to the following formula: 

Salary in 
Brussels  
(in euros) 

X 

Correction 
coefficient 

(= Economic parity 
/ Exchange rate) 

X 

Exchange rate  
(=1 for euro-countries) 

Salary in duty 
station  
(in euros for euro-
countries) 

= 

Correction  coefficients  are  updated  at  least  once  a  year  with  effect  on  1  July7.  The  detailed 
evolution of correction coefficients during the reference period is provided in part 5. 

2.2. 

Legal framework for the yearly implementation of the Method adopted in 2013

2.2.1.  Procedure for the implementation of the Method – workflow of the update 

Article  65  of  the  Staff  Regulations  provides  that  the  annual  update  of  remuneration  and 
pensions shall take place before the end of the year in the light of a report on statistical data 
prepared  by  Eurostat.  It  continues  indicating  that  the  amounts  and  weightings  (correction 
coefficients)  referred  to  in  Article  64  and  Article  65(1)  shall  be  understood  as  amounts  and 
weightings  the  value  of  which  at  a  given  point  in  time  is  subject  to  update  "without 
intervention  of  another  legal  act".  The  Commission  shall  publish  the  updated  amounts  and 
weightings  within  two  weeks  after  the  update  in  the  C  series  of  the  Official  Journal  of  the 
European Union for information purposes. 

Furthermore,  Annex  XI  to  the  Staff  Regulations  lays  down  detailed  rules  regarding  the 
calculation  of  the  update  and  the  role  of  Eurostat  and  national  statistical  institutes  in 
monitoring the quality of the basic data and the applied statistical methods. 

The combined reading of the above provisions, as confirmed in the recitals of Regulation No 
1023/2013,  indicates  that  the  update  is  defined  as  an  "automatic"  or  "mechanical"  event, 
which occurs without any decision-making process among the EU institutions and is based on 
a strictly defined methodology for processing of the relevant statistical data as regards to the 
calculation of the amounts and the weightings. 

In  terms  of  procedure,  the  Commission  has  defined  internally  an  administrative  workflow, 
involving  a  number  of  Commission  services,  to  ensure  the  proper  implementation  of  the 
update once the underlying statistical data is calculated and transmitted by Eurostat. The main 
objectives  of  the  workflow  are  to  put  in  place  the  necessary  controls  and  quality  checks  to 
ensure the necessary budgetary coordination and the timely information by the Commission to 
the EU institutions, bodies and agencies.  

Since  2014,  this  workflow  has  been  applied  smoothly  by  the  Commission  services.  It 
significantly facilitated the successful technical implementation of the Method. As a result, all 
due  payments  and  recoveries  that  resulted  from  the  2014-18  updates  and  affected  the 

7 An intermediate update may take place with effect on 1 January in the event of a substantial change in the cost 

of living between June and December. 

4 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
remuneration  and  pensions  of  the  staff  in  the  EU  institutions  and  agencies  were  executed 
within the statutory timeframe.  

2.2.2.  A set of strict reporting obligations 

While the yearly implementation of the update does not necessitate the adoption of any legal 
act, the co-legislators provided for strict reporting obligations: 

-  Under  Article  65(1)  of  the  Staff  Regulations,  every  year  the  Commission  shall 
transmit a report8 to the European Parliament and the Council on data pertaining 
to the budgetary impact of remuneration and pensions of Union officials,  

-  Under Article 15 of Annex XI to the Staff Regulations the present interim report 
to the European Parliament and the Council on the application of Annex XI and 
of Article 66a of the Staff Regulations shall be submitted in 2018, 

-  Also  under  Article  15  of  Annex  XI  to  the  Staff  Regulations,  before  31  March 
2022 the Commission  shall submit a report to  the European Parliament  and the 
Council  assessing  whether,  in  particular,  the  evolution  of  purchasing  power  of 
remuneration and pensions of Union officials is in accordance with the changes 
in  the  purchasing  power  of  salaries  in  national  civil  services  in  central 
governments.  On  the  basis  of  that  report,  if  appropriate,  the  Commission  shall 
submit  a  proposal  to  amend  Annex  XI  as  well  as  Article  66a  of  the  Staff 
Regulations on the basis of Article 336 of the Treaty on the  Functioning  of the 
European Union.  

3. 

SPECIFIC INDICATORS 

The Specific Indicators measure changes in the purchasing power of civil servants in central 
governments of Member States. 

3.1. 

Specific indicator trends for individual Member States  

Calculations  and  figures  relating  to  specific  indicators  are  based  on  data  supplied  and 
validated by the responsible statistical authorities in the Member States. To this end, a yearly 
remuneration  questionnaire  has  been  developed  and  updated  over  time.  A  set  of  country-
specific methodology manuals and assessment reports is also being made public to raise the 
level of transparency9. 

TABLE  1  summarises  the  available  data  for  each  Member  State  for  the  period  2014-2018 
together  with  a  simple  arithmetic  average  value  for  the  period.  TABLE  2  shows  the  same 
data, re-expressed as a cumulative index (2012=100). 

8 COM(2015) 597 final, COM(2016) 717 final, COM(2017) 699 final. 
9  The  general  methodology  manual  for  calculating  Specific  Indicators  is  available  on  Eurostat’s  website.  In 
addition, 13 country-specific assessments have already published as of late 2018 and work is ongoing 
with other national authorities to increase the number of published assessments (see the following link: 
https://ec.europa.eu/eurostat/web/civil-servants-remuneration/specific-indicators/country-assessments).  

5 

 
 
 
 
 
 
 
 
                                                           
3.2. 

Trend of the Global Specific Indicator as defined in the 2013 Method 

Under the Method adopted in 2013, the GSI is computed as of 2015 using a sample of eleven 
reference  Member  States  (weighted  by  GDP):  Belgium,  Germany,  Spain,  France,  Italy, 
Luxembourg, Netherlands, Austria, Poland, Sweden and the United Kingdom.  

Annual and cumulative data by Member State of the applicable sample 

TABLE 3 shows the time series of the specific indicators for the applicable sample of eleven 
Member  States  since  2015,  together  with  a  simple  arithmetic  mean  value  for  the  period. 
TABLE 4 shows the same data, re-expressed as a cumulative index (2014=100). 

Global specific indicator for the applicable sample 

The cumulative impact of the GSI since 2015 is illustrated in GRAPH 5. This corresponds to 
the evolution of purchasing power of civil servants in the sample of 11 Member States over 
the period (weighted by GDP expressed in Purchasing Power Standards). In accordance with 
the  principle  of  parallelism  (see  part  2.1.1),  the  purchasing  power  of  EU  staff  followed  the 
same evolution. 

GRAPH 6 shows the time series since 2015 of the global specific indicator, together with the 
Joint Index and the consequent annual update for EU staff. 

TABLE 7 presents these time series data, re-expressed as a cumulative index over the period. 
The global specific indicator, computed as a simple average for the four-year period, is 100.5; 
the  cumulative  impact  to  July  2014  (2014=100)  is  102.1.  The  average  annual  inflation  in 
accordance with the Joint Index for Brussels and Luxembourg over this period was 101.5; the 
cumulative  impact  is  105.9.  The  average  annual  update  to  remuneration  and  pensions  was 
102.2; the cumulative impact is 109.2.  

3.3. 

The Global Specific Indicator as defined under previous Methods 

Using  a  sample  of  Member  States  to  calculate  the  GSI  has  not  always  been  the  approach 
chosen by the legislator. Prior to 2004, the GSI was calculated by reference to the statistical 
data for all Member States (e.g. 15 Member States in 2003).  

Furthermore, during the negotiations leading to the 2004 reform, the Council decided to refer 
to  a  sample  of  8  reference  Member  States.  This  decision  was  motivated  by  a  retrospective 
data  analysis  suggesting  that  developments  in  that  sample  would  reflect  closely the average 
evolution in all Member States. However, it is to be noted that a subsequent analysis showed 
that the actual evolution of purchasing power in the selected sample after 2004 was lower than 
the average for all Member States.  

In  2013,  the  co-legislator  maintained  the  principle  of  a  sample  of  Member  States  while 
increasing its size from 8 to 11. 

With the sample of 8 Member States applicable under the previous Method (2004-2013), the 
simple average of the yearly GSI for the period 2015-2018 would be 100.7 and the cumulative 
impact (2014=100) would be 102.5. 

With  all  28  Member  States  the  simple  average  of  the  yearly  GSI  for  the  period  2015-2018 
would be 101.4 and the cumulative impact (2014=100) would be 105.4. 

6 

 
 
 
 
 
 
3.4. 

Departure from the general principle of parallelism 

3.4.1.  The suspension of salary updates for two years (2013-2014) 

As part of the reform of the Staff Regulations in  2013, the European Council called for the 
adjustment  of  remuneration  and  pensions  of  all  staff  of  the  Union  institutions  through  the 
Method  to  be  suspended  for  two  years.  Thus  no  update  of  remuneration  and  pensions  took 
place  in  2013  and  201410  and  therefore  no  General  Specific  Indicator  could  have  been 
calculated for the same period according to the clear text of the Staff Regulations. 

While the suspension of the update discontinued the application of the principle of parallelism 
for  the  period  2013-2014,  the  correction  coefficients  continued  to  be  updated  to  ensure 
equality of purchasing power between the different places of employment. 

3.4.2.  The impact of the EU solidarity levy 

The solidarity levy is a deduction from the remuneration of EU staff that was re-introduced at 
an increased rate on 1 January 2014. The rate of the solidarity levy, which is applied to the 
base defined in Article 66a(3) of the Staff Regulations, is 6%. It is increased to 7% for staff in 
grade AD 15, step 2, and above. 
In the draft 2019 budget11, revenues  from the solidarity levy are  expected to  reach EUR 93 
million. GRAPH 8 shows the evolution of these revenues since 2012. 

3.4.3.  Application of the moderation and exception clauses 

Between 2015 and 2018, Eurostat duly verified the figures of the updates against the criteria 
for the moderation and exception clauses as set out in Articles 10 and 11 of Annex XI to the 
Staff Regulations.  

The General Specific Indicator did not exceed an upper limit of +2% or a lower limit of -2% 
(see GRAPH 5). Therefore the moderation clause did not apply. 

The annual EU GDP growth forecast available at the time of each yearly Eurostat report was 
positive.  Therefore  the  exception  clause  under  Article  11(1)  of  Annex  XI  to  the  Staff 
Regulations did not apply. 

The  final  data  on  annual  EU  GDP  growth  was  positive.  Therefore  no  correction  was  made 
under Article 11(2) of Annex XI to the Staff Regulations. 

4. 

THE JOINT INDEX 

The Joint Index measures changes in the cost of living in Belgium and Luxembourg for EU 
officials according to the distribution of staff serving in these two Member States, based on 
the Harmonised Indices of Consumer Prices (HICP) in the case of Belgium and the Consumer 
Prices Index (CPI) in the case of Luxembourg, in accordance with Article 1 of Annex XI to 
the Staff Regulations. 
Due to the specific consumption weights used for aggregating the Joint Index12, there may be 
limited differences between its evolution and the evolution pattern of the HICP for Belgium 
and the CPI for Luxembourg13 for a given year.  

10 Pursuant to Article 65(4) of the Staff Regulations. 
11 COM(2018) 300. 
12 As compared with the regular weights used for price statistics, the main difference for aggregating the Joint 
Index is the use of weights for rents that include owner-occupiers (instead of considering only tenants).  

13 Values shown are for the overall aggregate index; actual calculations are done from detailed level. 

7 

 
 
 
 
 
                                                           
GRAPH  9  shows  the  Joint  Index  time  series  (annual  increase  June-June  by  reference  to 
previous  year),  together  with  comparable  information  for  Belgian  HICP  and  Luxembourg 
CPI. 

The average Joint Index over the period from 2015 to 2018 has been 101.5. The cumulative 
index for the whole period to June 2018 (base June 2014 = 100) is 105.9. 

By comparison, the average HICP in Belgium over the period was 101.7 and the cumulative 
total for the period was 107.0. The average CPI in Luxembourg over the period was 100.8 and 
the cumulative total for the period was 103.0. 

5. 

CORRECTION COEFFICIENTS 

In accordance with Article 64 of the Staff Regulations, the remuneration of officials serving in 
places of employment outside Brussels and Luxembourg is expressed in euro and adjusted by 
a  correction  coefficient  for  their  location  which  is  set  above,  below  or  equal  to  100%.  The 
objective  of  correction  coefficients  is  to  ensure  that  purchasing  power  in  a  given  place  of 
employment reflects the equivalent situation in Brussels.  

Correction coefficients are mathematical factors which, when applied to  a monetary amount 
expressed  in  euro,  together  with  the  official  exchange  rate  to  the  euro  (e.g.  for  a  particular 
duty station city), identify the economic parity. The latter is a statistical value reflecting the 
cost-of-living difference (e.g. between the duty station city and Brussels) and it corresponds to 
the  average  ratio  of  prices.  It  thus  reflects  the  amount  in  national  currency  in  a  particular 
location which is needed to purchase the equivalent basket of goods and services in Brussels 
with one euro. 

The methodology for calculating correction coefficients is defined and regularly improved by 
Eurostat in cooperation with the national statistical institutes. For the period into consideration 
it is worth mentioning the following developments: 

- 

Implementation of a more developed methodology for comparing healthcare and 
education costs across Member States, 

-  An increasing number of organisations willing to cooperate with  Eurostat14 and 
to use the data issued by Eurostat for different purposes (e.g. the United Nations 
recently decided to use the data on correction coefficients to adjust the salaries of 
their staff working in the EU based on the cost of living).    

Trends of correction coefficients   

5.1. 
TABLE 10 shows correction coefficient values for individual duty stations in the EU15 for the 
period 2013-201816.  

14  For  instance,  the  “family  budget  surveys”  conducted  to  define  consumption  weights  have  been  fully 
harmonised  with  the  Coordinated  Organisations  (e.g.  OECD,  Council  of  Europe)  and  the  United 
Nations. 

15  In  accordance  with  Articles  12  and  13  of  Annex  to  the  Staff  Regulations,  specific  weightings  (correction 
coefficients) may also apply to the remuneration of staff posted outside the EU. The updated value of 
these weightings is annexed to the yearly reports adopted by the Commission on data pertaining to the 
budgetary  impact  of  the  updates.  A  specific  methodology  has  been  developed  by  Eurostat  in 
cooperation with national statistical authorities. 

16 TABLE 12 presents only the correction coefficients resulting from the successive annual updates. Intermediate 

updates taking effect on 1 January are not presented. 

8 

 
 
 
 
 
 
                                                           
From  this  table  it  is  apparent  that  the  correction  coefficients  for  different  locations  have 
followed  different  trends  over  time.  In  19  locations  they  have  decreased  over  the  period, 
whilst 12 locations have experienced increases. 

It  is  to  be  noted  that  since  the  entry  into  force  of  the  amended  Annex  XI  to  the  Staff 
Regulations a new procedure for creating or withdrawing correction coefficients has been in 
force, in accordance with Article 9 thereof17. During the period 2014-2018 no formal request 
has  been  submitted  to  the  Commission  and  the  list  of  applicable  correction  coefficients  has 
remained stable. 

5.2. 

Issues faced by the Commission with regard to correction coefficients 

5.2.1.  Perception of correction coefficients as impacting negatively purchasing power and 

attractiveness of the EU public service 

The  correction  coefficients  are  often  mistakenly  perceived  as  the  driver  of  the  decrease  of 
purchasing  power  of  EU  staff  and  the  Commission  administration  is  often  asked  about  the 
role of correction coefficients and the methodology used for computing them. Such questions 
are raised by stakeholders, including staff, staff representatives, host state representatives etc. 
This issue arises in particular in cases involving staff whose place of employment is subject to 
a  correction  coefficient  below  100,  particularly  when  this  specific  coefficient  is  subject  to 
downward updates. 

Correction  coefficients  only  aim  at  maintaining  over  time  the  equivalence  of  purchasing 
power  between  staff  posted  in  different  Member  States  and  the  staff  posted  in  Brussels. 
Conversely, the correction coefficients do not aim at maintaining purchasing power at a given 
level.  Hence,  as  the  purchasing  power  of  staff  in  Brussels  decreased  (reduction  by  10.5% 
between 2004 and 2018) the purchasing power of staff in all places of employment decreased 
in the same proportion.  

At the same time, the above perception of correction coefficients remains an issue related to 
attractiveness of the EU civil service in some Member States. In that regard, a number of EU 
agencies reported to the Commission a visible negative impact on their capacity to recruit and 
retain highly-qualified and geographically balanced staff.  

5.2.2.  Lack of consideration for expenses made outside the place of employment 

The  existing  methodology  as  developed  by  Eurostat  in  cooperation  with  national  statistical 
institutes is based on the assumption that staff member's expenditure is entirely incurred in the 
place  of  employment.  This  simplification  has  been  subject  to  some  questions  as  it  may  be 
seen  as  not  fully  reflecting  the  overall  consumption  patterns  of  staff  members,  which  also 
comprises  expenditure  outside  the  place  of  employment.  Eurostat  and  national  statistical 
institutes have initiated discussions on the possibility to update the statistical methodology of 
correction  coefficient  calculation  in  order  to  take  into  account  expenditure  incurred  outside 
the place of employment. 

17 This procedure involves notably the adoption by the Commission of a delegated act following a formal request 
submitted  by  the  appropriate  authorities  of  the  Member  States  concerned,  the  administration  of  an 
institution of the Union or the representatives of officials of the Union in a given place of employment. 

9 

 
 
 
 
 
 
 
 
                                                           
5.2.3.  Cost of living in Luxembourg 

On the occasion of the last Staff Regulations reform, the co-legislators maintained the long-
lasting  legislative  solution  that  no  correction  coefficient  shall  be  applicable  to  the 
remuneration  of  staff  in  Brussels  and  Luxembourg,  having  regard  to  the  special  referential 
role of those places of employment as principal and original seats of most of the institutions. 
At the same time, the co-legislators decided to take due account of inflation in Luxembourg 
by creating the Joint Index (see part 4). 

This legislative solution has been subject to criticism by some staff members whose place of 
employment  is  Luxembourg,  who  have  argued  that  it  does  not  properly  reflect  alleged 
differences in the cost of living between Brussels and Luxembourg. Recently, staff members 
referred  to  the  introduction  of  a  specific  correction  coefficient  for  Luxembourg  by  the 
European Free Trade Association, which has its own staff rules. 

The absence of a correction coefficient in  Luxembourg under the EU Staff Regulations was 
also  subject  to  several  challenges  before  the  EU  Courts.  Based  on  the  latest  judgment 
rendered by the EU General Court in October 2018, this legislative solution is confirmed18 as 
long as the Staff Regulations as amended in 2013 remain into force. 

6. 

CONCLUSIONS 

Since its introduction in 2014 Annex XI to the Staff Regulations and Article 66a thereof have 
been successfully implemented by the Commission. The Method for update of remuneration 
and  pensions  set  therein  by  the  European  Parliament  and  the  Council  have  proved  its 
efficiency  and  effectiveness  over  the  five  annual  cycles  of  its  implementation  (2014-2018). 
The Method has achieved its objectives while putting aside the inter-institutional tensions and 
court cases known from the past. 

In  particular,  the  following  conclusions  may  be  drawn  based  on  the  implementation  of  the 
Annex XI to the Staff Regulations and Article 66a for the period 2014-2018: 

(1) 

(2) 

(3) 

In  2013  and  2014,  salaries  and  pensions  of  EU  officials  were  “frozen”  in 
nominal terms. This came on top of limited salary adjustments in 2012 (0.8%) 
and no salary adjustment in 2011.  

As of 1 January 2014, a solidarity levy was reintroduced at an increased rate. 
This  effort  of  solidarity  translated  into  an  increased  contribution  of  EU 
officials  to  the  general  EU  budget  in  the  aftermaths  of  the  economic  crisis. 
This  contribution  has  been  growing  throughout  the  period  even  as  the 
economic and social situation of the Union significantly improved. 

Since 2015, national civil servants of 11 reference Member States have seen 
the  purchasing  power  of  their  salaries  increase  by  2.1%.  As  a  result  of  the 
application of the principle of parallelism inherent to the Method, since 2015 
the  purchasing  power  of  EU  officials  increased  in  parallel  with  that  of 
national civil servants in those 11 reference Member States. The use of data 
for all EU28 Member States though would have produced different figures (+ 
5.4%). 

(4) 

Following an initial phase of a higher-than-average increase of the figure of 
the update in 2015 and 2016 that could be described as a “catch-up” effect in 
the Member States after the economic and social crisis, the following yearly 

18 In the Judgment of the General Court (Eighth Chamber) of 4 October 2018 in case T-546/16 Marina Tataram 

v European Commission, the application was dismissed as inadmissible.  

10 

 
 
 
 
                                                           
(5) 

(6) 

(7) 

exercises  in  2017  and  2018  have  resulted  into  moderate  nominal  salary 
increases.  

In  net  terms  in  2018,  the  Method  resulted  into  a  decrease  of  the  purchasing 
power of EU staff by 0.4%.  

As  the  Method  contains  an  automatic  annual  update  and  automatic  crisis 
clauses,  it  effectively  remedied  the  difficulties  in  the  implementation  of  the 
previous  methods.  At  the  same  time,  the  Method  remained  constantly 
scrutinised by the European Parliament and the Council via the annual reports 
delivered by the Commission. 

The Method also successfully stood legal scrutiny before the European Courts 
in the few individual cases brought against it. It also avoided social tensions 
as no major strikes took place in the Institutions during that period.  

(8)  When  it  comes  to  the  full  implementation  of  the  principle  of  equality  of 
purchasing power among EU staff in different places of employment via the 
system  of  correction  coefficients,  few  issues  have  been  identified  to  be 
closely followed during the next implementation period.  

11 

 
 
 
 
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TABLE 1: Annual specific indicator - All Member States[1][2][3][4][5][6][7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26][27][28]BEBGCZDKDEEEIEELESFRHRITCYLVLTLUHUMTNLATPLPTROSISKFISEUK2013102,3100,6104,499,3100,9124,398,894,695,1100,0100,0100,094,1100,3101,2100,399,3102,6100,599,8102,898,7114,4102,4105,0101,1101,9100,32014100,298,5101,7105,0100,9105,1100,5100,0107,9101,6100,0101,494,3110,5105,2102,0101,5102,1102,8101,899,9112,7106,898,0106,399,5102,6102,02015100,5101,2102,1100,1103,0105,7101,3100,0101,2100,6100,0100,6100,0109,6102,2101,7101,3102,2101,2101,7101,197,5103,899,9100,9100,1102,3100,52016103,0103,9134,8100,8101,0113,3103,7100,0104,9100,4102,3100,0100,0105,7103,198,8101,8102,8106,0104,9107,3102,6111,9102,0107,7100,6104,1101,12017102,0103,6109,5101,4103,7101,8103,1100,0100,9102,3103,5100,7101,297,9102,8103,8111,3102,198,5101,1103,0102,0111,8101,4110,3100,0100,4101,42018101,8120,8113,4103,1102,8104,4103,499,999,099,8111,1103,8101,7106,5102,8101,0103,7104,2103,0101,9100,6101,2114,3100,9116,8101,1102,7101,1simple average101,6104,8111,0101,6102,1109,1101,899,1101,5100,8102,8101,198,6105,1102,9101,3103,2102,7102,0101,9102,5102,5110,5100,8107,8100,4102,3101,1TABLE 2: Annual specific indicator - All Member States (cumulative data: 2012=100)[1][2][3][4][5][6][7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26][27][28]BEBGCZDKDEEEIEELESFRHRITCYLVLTLUHUMTNLATPLPTROSISKFISEUK2013102,3100,6104,499,3100,9124,398,894,695,1100,0100,0100,094,1100,3101,2100,399,3102,6100,599,8102,898,7114,4102,4105,0101,1101,9100,32014102,599,1106,2104,3101,8130,699,394,6102,6101,6100,0101,488,7110,8106,5102,3100,8104,8103,3101,6102,7111,2122,2100,4111,6100,6104,5102,32015103,0100,3108,4104,4104,9138,0100,694,6103,8102,2100,0102,088,7121,4108,8104,0102,1107,1104,5103,3103,8108,4126,8100,3112,6100,7106,9102,82016106,1104,2146,1105,2105,9156,4104,394,6108,9102,6102,3102,088,7128,3112,2102,8103,9110,1110,8108,4111,4111,2141,9102,3121,3101,3111,3103,92017108,2108,0160,0106,7109,8159,2107,594,6109,9105,0105,9102,789,8125,6115,3106,7115,6112,4109,1109,6114,7113,4158,6103,7133,8101,3111,7105,42018110,1130,5181,4110,0112,9166,2111,294,5108,8104,8117,7106,691,3133,8118,5107,8119,9117,1112,4111,7115,4114,8181,3104,6156,3102,4114,7106,6 
 
 
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TABLE 3: Annual specific indicator - Sample of 11 Member States [1][2][3][4][5][6][7][8][9][10][11]BEDEESFRITLUNLATPLSEUK2015100,5103,0101,2100,6100,6101,7101,2101,7101,1102,3100,52016103,0101,0104,9100,4100,098,8106,0104,9107,3104,1101,12017102,0103,7100,9102,3100,7103,898,5101,1103,0100,4101,42018101,8102,899,099,8103,8101,0103,0101,9100,6102,7101,1simple average101,8102,6101,5100,8101,3101,3102,2102,4103,0102,4101,0TABLE 4: Annual specific indicator - Sample of 11 Member States (cumulative data: 2014=100)[1][2][3][4][5][6][7][8][9][10][11]BEDEESFRITLUNLATPLSEUK2015100,5103,0101,2100,6100,6101,7101,2101,7101,1102,3100,52016103,5104,0106,2101,0100,6100,5107,3106,7108,5106,5101,62017105,6107,8107,2103,3101,3104,3105,7107,9111,8106,9103,02018107,5110,8106,1103,1105,1105,3108,9110,0112,5109,8104,1 
 
 
 
 
 
 
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2015100,2100,2101,2101,2102,4102,42016101,9102,1101,4102,6103,3105,82017100,4102,5101,1103,7101,5107,4201899,6102,1102,1105,9101,7109,2Simple avg. 2015-2018Simple avg. 2015-2018Simple avg. 2015-2018100,5101,5102,2TABLE 7: Global Specific Indicator, Joint Index and annual updatecumulative 2014=100Global Specific Indicatorcumulative 2014=100Joint Indexcumulative 2014=100Annual update 
 
 
 
 
 
 
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BGSofia57,555,152,151,153,455,2CZPrague80,075,073,473,278,383,0DKCopenhagen134,8133,0131,8133,1133,9131,9DEBerlin96,897,296,696,197,599,3Bonn94,994,693,492,693,995,6Karlsruhe92,895,093,893,094,696,7Munich108,2107,7106,0105,5107,5110,0EETallinn78,978,678,077,680,382,2IEDublin113,0115,9116,6118,3119,8117,7ELAthens91,286,879,979,379,981,8ESMadrid96,394,590,288,188,791,7FRParis117,4116,8114,6113,8114,8116,7HRZagreb80,077,674,673,574,976,4ITRome104,4100,499,497,997,396,5Varese92,893,192,290,490,990,9CYNicosia83,781,277,374,374,477,9LVRiga76,176,574,273,074,977,6LTVilnius71,971,469,069,774,373,6HUBudapest76,171,469,070,074,571,9MTValletta84,483,484,585,786,590,2NLThe Hague108,9107,8107,8108,0108,3109,9ATVienna108,3107,2105,9104,7106,3106,3PLWarsaw73,074,171,866,770,668,6PTLisbon83,182,279,280,682,485,7ROBucharest69,869,564,863,863,964,0SILjubljana85,484,781,280,781,584,6SKBratislava80,279,076,475,777,378,5FIHelsinki123,7123,0119,7118,6119,9118,5SEStockholm132,9127,5127,9127,4127,9122,0UKLondon139,2150,7166,9141,8133,5134,7Culham107,6116,7127,7107,3100,5102,6TABLE 10: Correction coefficients in all duty stations in the EU between 2013 and 20181.7.2018Country and place of employment1.7.20131.7.20141.7.20151.7.20161.7.2017