*Update 02.12.2024 here’s the official announcement of the 2024 annual update of remuneration and pensions**Update 21.11.2024 check out the European Court of Auditors, 2024, Special report 24/2024: EU Civil service–A flexible employment framework, insufficiently used to improve workforce management: it concludes that

‘While the purchasing power of EU staff has decreased more than that of national civil servants, salaries remain on a par with what other international organisations offer their staff.‘ (Paragraph 101)*

Original article: Many colleagues have reached out to us about the significant drop in the correction coefficient (CC) in Ispra, where the CC drops from 95% (1 July 2023) over 92.1% (1 January 2024) to a value of 86.9% as of 1 July 2024.  We understand that the colleagues in Ispra are not happy about this (and this is probably a mild statement).

While it is difficult to give a short answer (especially without having access to the detailed calculations), we can give you some elements of the answer.   In the following, all references to pages, tables, etc. refer to Appendix 1 of the 2024 Eurostat report.

1. Overall inflation: On pages 29 and 30, you see the inflation values for Belgium, Italy and Luxembourg. For Italy, this was +0.9%, for Belgium +5.4% and for Luxembourg +2.8%. While one cannot take over these numbers 1:1, it already gives a clear indication that the inflation in Brussels and Luxembourg was substantially higher than in Italy.
   Quoting from page 90:
   The impact on the overall parity of applying detailed sub-indices at basic heading level for the year to July 2024 generated a decrease (i.e. inflation was lower than in Brussels) in 25 places and an increase (i.e. inflation was higher than in Brussels) in 2 places – with the impact ranging between +3.1 % (RO-Bucharest) and -3.6 % (IT-Varese).
2. Rents: Table 2.2 on page 84 shows an economic parity value of 0.711 for expenditure group 4 (Housing, water, electricity, gas and other fuels) in 2024. This means that where one pays 1000 EUR for rent in Brussels, colleagues in Ispra pay 711 EUR for comparable housing (and other goods under this group). In 2023, this value was still at 0.840 or 840 EUR. This is a significant drop and, given the high weight of 30% for this category, creates a visible downward effect on the total. In the words of Eurostat (page 96):
   In 2024, the rent correction coefficient is lower than the correction coefficient without rent in 4 of the duty stations (BG, IT-Varese, CY and LV). This means that, for those places, the rents lead to a reduction of the global correction coefficient.
3. New price data: The 2024 salary update includes price data from the spring 2023 ECP survey on Services. ECP is the European Comparison programme and is THE price collection for all price data. In Italy, it is run by ISTAT. While the survey is named after “services”, it is much broader than this and affects 26 of the 80 so called basic headings that are used to categorise the different items in the basket of products used to determine the development of prices. As can be seen on page 90, the impact on the overall economic parity for Ispra/Varese was -3.6%.

What happens next?

As the CC update has a retrospective effect as of July 2024, the decrease for Ispra means that, since July, the paid salaries in Ispra were too high. PMO will therefore recover the money that was paid in excess of the new CC for the period since July from salaries as of December 2024. How much is recovered exactly depends on individual situations. In any case, a recovery cannot be spread over more than 12 months (Article 3(6) of Annex XI to the staff regulations).

Fortunately, the new Correction Coefficient will be partly compensated with a salary increase: A residual update with retrospective effect as of 1 July 2024 of +4.1% that you will see on your December payslip;  and another update of +1.2% as of 1 April 2025. The +1.2% update in April 2025 belongs technically and legally to the 2024 yearly update. Therefore, this update will not trigger another update of the correction coefficients. It is neither technically nor legally possible to bring forward the April update for places like Ispra, where the total update (including the CC) is negative.

The above text focuses a lot on the prices. This is however only one part of the calculation. The other part are the weights, which establishes how much of your income you spend on which type of expenditure. These weights are determined via a family budget survey (FBS). The last FBS for Ispra dates from autumn 2016 and an update is definitely needed. According to the same page in appendix 1, the timing of the next FBS round is still to be decided. We were however assured that Eurostat is planning on starting in the not-too-distant future with the next round of FBS.

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