The great freeze

MARCH 2014 – The great freeze: How the ‘aquired rights’ and benefits of the pre-2004 ‘Gucci’ generation are being protected while the post-2004 staff has to shoulder the burden of the budget cuts

EISBAER

A loud sigh of relief swept through the EU institutions when at a trilogue meeting on 4 March, EU legislators agreed on a salary increase for EU civil servants of 0.8% for 2012, which decision they finally endorsed on 12 March.

Together with the 2011 zero-round and the 2 year freeze for 2013 and 2014 decided by the Council last year, this amounts to an almost complete 4 year salary freeze. The resulting net loss of purchasing power is a slap in the face to all of those who at their last trip to the supermarket may have wondered about the extraordinary rise of living costs in Brussels (the official inflation rate between 2011 and 2013 was 6.2%, but the felt inflation is much higher) while the situation certainly is no better in Luxembourg, in Ispra and in most other places..

“It could have been worse” – blared a tract (see here) from one of the biggest European staff unions, purportedly quoting the Commission. Oh yes, indeed it could have been much worse, especially for pre-2004 staff if their pre-2004 Gucci benefits (salaries in excess of 10,000 Euros and pension benefits in excess of 7,000 Euros for the average pension) would have been touched, but they weren’t! Because – and this now turns the stomach of every post-2004 honest, hardworking official carrying the entire institution on their worn-out backs – they have had Super-Dagmar who “fought with the greatest determination to protect the personnel and our civil service from the destructive will of the Council … during countless discussions and trilogues with the Council”. WOW, indeed!!!

But well, let’s be more precise on this: Frau Roth-Berendt, honourable rapporteur of the EP for the staff regulations may have had something of a conflict of interest. This was suggested by the ‘European Voice’ in an article published on 21 December 2011 (see here) – “German MEP is an intriguing choice for dealing with staff regulation” – which goes on to inform that she is married to the ex-DG for Human Resources – Herr Horst Reichenbach – co-perpetrator of the 2004 reform.

It therefore comes as no surprise that indeed, she fought tooth and nail for the preservation of the ‘acquired rights’ of the pre-2004s … leading the post-2004s gracefully to the guillotine for a second time; and the ‘good ol’boys’ in the Council were duped into thinking that they had achieved a grand victory in battle against their public enemy number one – the EU civil service fat cats, of which one third receive monthly stipends of 10,000 Euros and more – a fact which Mr Cameron had loudly complained about in the run-up to that fatal Council meeting.

And what a pyrrhic victory this was where in the end, the Council inflicted a 2.6 % de-facto cut on all salaries across the board, which does not solve very much and does not tackle the root problem. It just postpones once again the real reform that will be necessary further down the line, in 10 or 15 years’ time, when pension costs will be higher than the costs for active salaries.

For now, the indecently high salaries of the higher grades will remain a red flag for the Member States and easy target for the Eurosceptic media … while cutting the already low salaries of the GF1s, AST1s or AD5s .. which will not yield many savings for the EU coffers and which are not what the Eurosceptics attack anyway! It is like trying to solve the problem of excessive bonuses for bank executives by cutting the salaries of all other bank employees by half! The fact is that the 2004 reform introduced new salaries for new recruits that were generally in line with leaner times: less attractive than before, but still reasonably attractive to get qualified candidates (even for an institution that in its career system rates seniority over merit and does not count outside experiences – a huge frustration for many post-2004s).

The only problem was that (very premeditatedly) it did not only leave pre-2004 salaries of thousands of colleagues unaffected, but catapulted many colleagues from the former A4 end-of-career salaries (around 10.000 per month) up towards AD14 salaries in the region of 12,000 per month, not justified by responsibility or experience. This is what caused the public outcry and – dare we say rightfully – called Member States to action!

If common sense wasn’t such a scarce resource in the institutions compared to hot air and greed, both of which there is alas a great abundance, there could have been a much more reasonable and quite ‘simple’ solution: de-coupling the evolution of pre- and post- 2004 salaries; a system that based on a transparent and reasonable method would slowly melt down the unnecessarily high salaries of pre-2004s (and with it all pensions based on these salaries) while discriminating positively to the benefit of post-2004s.

Such a method would not only be better for post-2004, it would also be better for pre-2004, in that they could politically (and morally, if anyone is bothered) justify their consistently higher salaries by pointing out that they are only transitory, and that there is already a method in place to gradually melt them down.

Before anybody gets a seizure, please do remember that such a method has already been in place – for everybody. Over the last 10 years we all have lost roughly 10% of our purchasing power. And the Member States will certainly be tempted to find other ways to cut our salaries by another 10% over the next 10 years. Pity that by doing so, they will (again) further erode the post-2004 salaries, down to “race-to-the bottom” levels that will only remain attractive to mediocre graduates and/or those Member States with severe financial and employment problems.

Our decision-makers desperately need to understand that the present system is not only unfair and divisive and will do great damage to the future of the service they depend on, but that it is financially unsustainable. So we need a reform of the reform of the reform. We need this sooner rather than later and make no mistake, Generation 2004 will increasingly continue to be the standard-bearer in exposing these truths which are so inconvenient to some.

If we do not manage to decouple the development of the old and the new salaries in the near future, we will eventually be all pushed under the water as collateral damage of the Member States (justifiably) trying to reign in excessive salaries and pension rights. In the meantime we need urgent solidarity action to address the gaps that cause the internal divisions – a system of ‘positive discrimination’ for post 2004 staff.

To fight for this against the entrenched interests of a privileged but powerful minority will be an uphill struggle, but it is a struggle worth fighting for in the interest of all post-2004 colleagues, the thousands of pre-2004 colleagues who recognise and tell us that we are right and ultimately for the future of the European project itself. This is not just the struggle of Generation 2004 but of every staff organisation, union and staff representative worthy of their name. After all the lip-service in sympathy with post-2004, will they finally rise up to the occasion?

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