Staffing the EU Institutions

Introduction

This paper looks at the nature and structure of the staffing of EU institutions.  This is a topical subject, as debates are to take place in 2012 between the Council of Ministers and the European Parliament about a further ‘reform’ package of measures.  The underlying issue is that of maintaining a high quality independent European public service.  There is a specific UK dimension: the low and falling share of UK staff in the European institutions, and especially the Commission.

Background

The European Coal and Steel Community (1951) drew its staff from both public and private sectors of its Member States.  As the later Communities were all merged (in 1967) general Staff Regulations were drawn up based which were intended to provide careers, pay and conditions that reflected the best of the French and German systems, in order to attract good quality staff from all the Member States.  They should bring knowledge of the countries from which they came but be independent of them, so providing the possibility of long-term careers.  They needed to be able to be mobile, and to work across the Member States and beyond.

Recruitment methods followed those of the original Member States: for the higher grades, both academic qualifications and some post-graduate experience was needed.  Success in a recruitment competition didn’t result in an immediate job offer, however; it meant a place on a ‘reserve list’ of suitable candidates, from which staff from as many different countries as possible might be offered a job.  The need to draw staff from all Member States, particularly at the higher levels, meant that some flexibility was allowed to these exacting procedures by easier provisions for recruiting temporary staff.

Pay and related issues (including pensions) followed the same principles.  Staff were recruited on the basis of a single salary system irrespective of the geographical origin of the staff member.  Pay scales were based on an average of what was paid to Member States’ civil servants, and comparable tax was paid, though into the budget of the European Community, to which the official was expected to be loyal.  (From the outset this was a very simple tax system with none of the allowances and exemptions familiar in national tax systems; to the limited extent that special circumstances were taken into account this was done by allowances added to the basic salary).  Mechanisms were established to:

• ensure equality of pay for all staff of the same grade;
• guarantee equivalence of purchasing power no matter where the official was serving;
• take account of the costs of living abroad, and of bringing their family with them.

A medical insurance scheme copying those in the original Member States was also put in place to work with the health structures of these countries.

In the early days, the details of every aspect of careers, working conditions and pay were discussed by ministers – there are even stories of the Council of Ministers discussing the price of a dish of grated carrot in the staff canteen.  But taking all decisions at political level didn’t make sense.  The Staff Regulations was one response. So too – after salaries fell relative to the member states by some 35 per cent over the 1960s, and some staff unrest – was the adoption in 1972 of a ‘Method’ for determining salaries without the need for individual political decision.  This was based on the principle that pay of European Community staff tracked that of the public services in the Member States, going up or down according to an average weighted by size.

A European public service suited to its task

The EU in 2012, with 27 Member States with a much wider range of social and economic circumstances as well as traditions in the public sector, is now very different from the European Community of six in the 1960s.  There have also been major changes in the private sector.  It is remarkable that the systems designed some five decades ago continue to provide a high quality independent staff.  Several reasons contribute to this.

The total staff of the European Union remains small in relation to its role.  Although there are now nearly five times the number of Member States as there were when the community was created, seven institutions, many agencies spread across the Union, and a worldwide system of representation, the total staff of the Union is still only some 56,000.  This can be compared – admittedly very superficially, but to give scale – with the staff of one major city in one of our Member States (Birmingham, some 35,000), or with one ministry (the UK Department of Work & Pensions employs 100,000).  Of the total of EU staff, some 10 per cent is needed for interpretation or translation.  Interpretation and translation for most or all languages are available only at the highest political level.  Below this, translation and interpretation are limited according to need and essentially only to meetings involving those outside the institutions.  Within the institutions staff are expected to manage without linguistic support.

One reason why the EU institutions have remained small has been close working relationship with national civil services and other experts.  Some tasks are delegated to national administrations (the bulk of the Common Agricultural Policy is administered in this way).  Also, in many areas of policy the Commission does not have enough staff to have detailed knowledge of the policy areas it has to work in.  Its departments therefore often draw on the expertise of experts drawn from the Member States, not necessarily from the public sector.  This closeness to the Member States has been added to by a policy of employing national officials within the institutions for short periods as ‘detached national experts’ (i.e. seconded).

There have been a steady stream of changes and reforms, which have kept the Union administrations – and notably the Commission, the largest – concentrated in size, and contained by cost.  The largest reform was in 2004 and achieved significant and extensive changes, including increased pension contributions, longer service before pension and limitations on early retirement, as well as major changes in career structures.  The reforms then made still go far beyond what has happened in the national civil services of most of the Member States.  They are estimated to deliver savings totalling €8 billion.

Can such a European public service survive?

Because national administrations implement EU regulations, the European public service has remained a small body working very closely with national administrations and experts.  In this context, its independence is crucial; if the Member States were to feel that it was putting national interests first, the system would no longer work.  That is why the ability of the EU public service to attract high quality staff for long-term careers matters – as well as to discern and defend EU interests in situations frequently involving top staff not only administrations of non-member countries but also of big corporations.

Career structures

There has been a shift to contractual staff for more junior functions, with more limited career prospects.  For middle and senior staff, the major change has been the great increase in the number of temporary staff and detached national officials.  While this offers a partial route to bring in nationalities that are under-represented, those who come to work in the institutions but expect to return to their national public service after a short time will have less independence from it than those who expect to work there for a much longer career.  They have less time to develop the contribution they make, particularly because of the need to adjust to the working environment of different languages.  Even more important, to build up a network of relationships in an administrative structure that brings together different cultures, and which relies on a wide range of contacts across the Member States, inevitably takes time, and will only produce its full value after a number of years.

Recruitment and geographical balance

Successive enlargements have increased the number of nationalities in the European institutions.  The institutions have always rejected the idea of a formal geographic quota, even if the need for a fairly strict balance has been informally accepted for the most senior positions.  Recruitment is open to all qualified candidates.  From a UK perspective, there are three difficulties:

• The professional experience required at graduate level doesn’t match that needed for the UK public service.  On the continent, the tradition is to recruit to public service people who probably have a fairly specialised first degree, and who have already gained some professional experience.  In the UK, the tradition was different (though it has now evolved), of selecting future senior staff without much regard to areas of study, and before professional experience had intervened, with training on the job;
• The language requirements: to reduce the need for language services within the institutions, the language requirements on recruitment have increased.  This puts many UK candidates at a major disadvantage because of the small place given to language teaching in UK schools;
• The negative political atmosphere in the UK towards the EU.

The result is that there is now a serious shortfall in the number of UK staff working in the institutions.  This will not be easy to correct, all the more so as pay and career structures are no longer especially attractive compared to UK public service employment.  The UK government (with others) also tries to reduce salaries and career prospects, which makes recruitment harder.

Pay levels and pay calculation

Pay levels may remain competitive for junior staff, especially from the newer member states.  Though comparisons are difficult and contested, at more senior levels pay levels are much less clearly attractive, and possibly now less than in the more prosperous Member States.  At the recruitment grades for graduate staff, anecdotally it seems that candidates feel that starting pay is not enough to justify bringing a family to Brussels or Luxembourg, where the cost of housing is considerable.  This now calls in question the ability of the institutions to recruit the best staff.

This evolution has been the result of constant efforts by certain Member States to reject or diminish the importance of the ‘Method’.  This has been misunderstood as an indexation which can only produce increases, whereas it is instead a linkage which can (and has) also produced decreases by bringing together real changes in salaries in the member states’ public services and the cost of living in the different countries where EU staff are employed (this latter is often negative in times of economic difficulty).  While by its nature, an average always produces a result that is ‘better’ than that which applies in one or more Member States and ‘worse’ than in others, most Member State representatives in the Council of Ministers have looked only at the comparison with their own country.  As a result, over the years the principle of parallel development has been compromised by overall cuts in take home pay, presented as special ‘crisis levies’ which have not been removed or reduced, but rather increased.  This has the effect of making EU staff bear twice the effect of an economic downturn – once through its impact on Member States’ public sector pay, once through the ‘crisis’ levy.

Pensions

Pensions are a general issue, as everywhere lives lengthen and medical costs increase.  There is no reason for EU staff to be exempt from the movement towards affordable systems that balance better the costs for the younger and the benefits of the older.  Pensions are also a big part of a salary scheme that needs to remain attractive. The EU has already increased pensionable ages, and taken other comparable measures which will stabilise the future cost of pensions (on a static staff hypothesis).  However, unlike many other pension schemes, the EU final salary pension scheme is fully funded, thanks to the care with which structures were put in place at the outset, with regular actuarial reviews and adjustments of contributions by staff and employer.

There is a pension fund to which both staff and employer contribute.  Since at the outset, when retirements were few, this would have produced much more income than was needed, the Member States decided that, rather than pay their contributions into a real fund they would keep the funds but record their value in a notional interest-bearing fund in the EU accounts, with the guarantee that this would be drawn down as and when the funds were actually needed.  The EU accounts show this notional fund, and therefore the money saved up by the Member States, at €37 billion, which is more than enough to fund all present liabilities.

Current issues

The Parliament and Council have to decide the future system of calculating salaries and pensions (the present system of parallelism – the ‘method’ – expires at the end of 2012).  The Commission has also chosen to seek further administrative economies.  It has therefore proposed:

• a reduction of staff of five per cent by all institutions over the next 5 years;
• the renewal of the ‘method’ of parallel development (though with changes that may produce future problems);
• further changes to careers;
• increases in pensionable age and further limits on early retirement.

At the moment, most Member States’ representatives (the UK included) are seeking far-reaching changes to undo, or greatly reduce, the linkage between EU and national civil service pay, and to take back responsibility for fixing many details of the system.

The European Parliament’s Legal Affairs Committee has recently adopted a position which broadly supports the Commission’s proposal.  It is expected that this will opinion will soon be formally passed to the Council of Ministers.

Under the Treaty of Lisbon, the Council no longer has the last word on this matter, as it used to on all administrative issues.  The decision – in the case of initial disagreement, as seems most likely – will be prepared through the conciliation procedure, involving iterative dialogue between the Council and the Parliament.  This will be the first time that this has happened in the administrative area.