Explanatory Memorandum to COM(2012)234 - Proposal for a COUNCIL REGULATION adjusting the correction coefficients applicable to the remuneration and pensions of officials and other servants of the EU - Main contents
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| dossier | COM(2012)234 - Proposal for a COUNCIL REGULATION adjusting the correction coefficients applicable to the remuneration and pensions of ... |
|---|---|
| source | COM(2012)234  |
| date | 25-05-2012 |
· Grounds for and objectives of the proposal
In accordance with Article 4 of Annex XI to the Staff Regulations, intermediate adjustments of remuneration and pensions under Article 65 of the Staff Regulations are to be made, on the basis of information provided by Eurostat, in the event of a substantial change in the cost of living between June and December, with due allowance being made for the forecast of the change in purchasing power during the current annual reference period.
Any Commission proposal needed is to be sent to the Council not later than the second half of April.
· General context
In accordance with Article 6 of Annex XI to the Staff Regulations, intermediate adjustments are to be made for all places (including Brussels) if the sensitivity threshold has been reached or exceeded in Brussels. If that sensitivity threshold for Brussels is not reached, intermediate adjustments are only to be made for those places where the sensitivity threshold has been exceeded.
In accordance with Article 7 of Annex XI to the Staff Regulations, the amount of the intermediate adjustment is the Brussels International Index multiplied, where appropriate, by half of the specific indicator forecast if this is negative.
The specific indicator measures changes in the real net remuneration, exclusive of inflation, of national civil servants in Member States’ central governments. Eurostat has calculated this indicator on the basis of the information supplied by the eight Member States referred to in Article 1 of Annex XI to the Staff Regulations.
The Brussels International Index measures changes in the cost of living in Brussels for officials and other servants of the European Union. Eurostat has drawn up this index on the basis of the data provided by the Belgian authorities.
The correction coefficients are the ratio between the relevant economic parity and the exchange rate provided for in Article 63 of the Staff Regulations multiplied, if the adjustment threshold is not reached for Brussels, by the amount of the adjustment.
The economic parities for remuneration establish the purchasing power equivalence of the remuneration paid in Brussels, as the reference city, with that paid in the other places of employment. Eurostat has calculated those parities in agreement with the national statistical bodies of the Member States.
The economic parities for pensions establish the purchasing power equivalence of the pension paid in Belgium, as the reference country, with that paid in the other countries of residence. Eurostat has calculated those parities in agreement with the national statistical bodies of the Member States.
· Existing provisions in the area of the proposal
This proposal is in addition to the proposal presented each year for adjusting remuneration and pensions.
Contents
· Consultation of interested parties
Methods of consultation used, main sectors covered and general profile of respondents
The elements of the proposal have been discussed with the staff representatives in accordance with the appropriate procedures.
Summary of replies received and the way in which they have been taken into account
The proposal takes account of the opinions of the parties consulted.
· Collection and use of expertise
There was no need for external expertise.
· Impact assessment
– The purpose of the proposal is to adjust remuneration and pensions in accordance with the legislation in force.
– The legislation in force permits no alternative.
· Summary of the proposed action
In accordance with Article 4 of Annex XI to the Staff Regulations, the purpose of the proposed action is to adjust remuneration and pensions in those places in which there has been a substantial change in the cost of living.
The change in the cost of living for Brussels, measured by the Brussels International Index, over the period June to December of the previous year, is 1.1 %.
Changes in the cost of living outside Belgium and Luxembourg during the reference period are measured by the implicit indices calculated by Eurostat. These indices are calculated by multiplying the Brussels International Index by the change in the economic parity.
The sensitivity threshold for a substantial change in the cost of living is the percentage corresponding to 7 % for a twelve-month period (3.5 % for a six-month period).
The implicit index applicable to remuneration has exceeded the sensitivity threshold in Estonia (4.1 %). The implicit index applicable to pensions has not reached the sensitivity threshold in any of the countries.
The amount of the intermediate adjustment is the Brussels International Index multiplied, where appropriate, by half of the specific indicator forecast if this is negative.
The specific indicator forecast is -1.6%, and thus the amount of the intermediate adjustment is 0.3 %.
The correction coefficients are the ratio between the relevant economic parity and the exchange rate multiplied, if the adjustment sensitivity threshold is not reached for Brussels, by the amount of the intermediate adjustment.
The new correction coefficients take effect on 1 January. However, for those countries or places whose implicit index is greater than 6.3 %, they take effect on 16 November. For those countries or places whose implicit index is greater than 12.6 %, they take effect on 1 November.
The correction coefficient for Tallinn calculated for December 2011 (on the basis of PPP for staff at December 2011) is 77.6. As a result, taking into account the amount of the intermediate adjustment, with effect from 1 January 2012, the correction coefficient applicable to remuneration of officials and other servants of the European Union in Estonia is 77.8. The correction coefficients applicable to pensions and transfers remain unchanged.
· Legal basis
The Staff Regulations, and in particular Annex XI thereto, constitute the legal basis.
· Subsidiarity principle
The proposal concerns an area that falls within the exclusive competence of the Union. The principle of subsidiarity does not therefore apply.
· Proportionality principle
The proposal is consistent with the principle of proportionality for the following reasons:
– Annex XI to the Staff Regulations provides for a Council Regulation.
– The financial burden results directly from application of the method of adjustment of remuneration and pensions provided for in the Staff Regulations.
· Choice of instruments
Proposed instrument(s): Regulation.
Other instruments would have been inappropriate for the following reasons:
– Annex XI to the Staff Regulations provides for a Council Regulation.
The impact of the adjustment to the correction coefficients applicable to the remuneration and pensions of officials and other servants of the European Union on both administrative expenditure is detailed in the financial statement annexed hereto.
Although the intermediate adjustment takes into account the increase in the cost of living for EU staff in Estonia, it results in lower expenditure. This is due to the Council's failure to adopt the Commission Proposal on the annual adjustment in December 2011. The 2011 annual adjustment would have lowered the value of the correction coefficient for Estonia from 78.5 to 75.4. However, as the annual adjustment was not adopted, the former value of 78.5 remained in force. The new Eurostat calculation for the intermediate adjustment shows that the cost of living in Estonia increased from 75.4 to 77.8. Since this new intermediate adjustment value is lower than the value currently in force, the intermediate adjustment results in lower expenditure.