Court rules against member states in EU salary battle - Main contents

EUOBSERVER / BRUSSELS - Europe's top court has ruled against a member state decision to limit an EU salary increase due to the economic downturn, a move likely to add further tension to already difficult EU budget talks.

National capitals voted in December 2009 to halve a planned 3.7 percent annual increase in salaries for EU officials, but on Wednesday (24 November) the European Court of Justice ruled the move to be illegal.

"The council [representing member states] exceeded the powers conferred on it by the [EU] staff regulations," the court said in a statement.

Annual pay adjustments for EU staff are calculated using an automatic mechanism based on the previous year's pay for civil servants in eight member states, including France, Germany, the UK and Italy.

The time delay means that while many national civil servants saw their salaries fall in 2009-2010, Brussels officials requested the inflation-busting raise of 3.7 percent, a prospect many national governments found distinctly unappetising as they forced through unpopular austerity programmes back home.

Instead, ministers voted in December to support a pay increase of 1.85 percent, causing EU staff unions to protest and leading the European Commission to take the matter to the European Court of Justice.

The disputed salary period dates from July 2009 to June 2010.

The court's decision notes that member states failed to invoke a special procedure contained in the EU staff regulations which provides greater leeway to make salary changes in cases of a "serious and sudden deterioration in the economic situation".

A commission official welcomed the ECJ decision, arguing that the special procedure was not relevant to Europe's gradual move into recession in 2009.

"We are satisfied with the court's decision," commission spokesman for EU administration Michael Mann told this website. "It is inline with the method of the annual adjustment for EU salaries which was agreed by member states until 2012."

The court's decision suggests member states may now be forced to adopt a new regulation to top up EU salaries over the disputed period. "There is also a legal requirement to pay interest on the salaries we didn't receive," noted Mr Mann. National ministers may seek to appeal the decision if possible however.

The ruling comes at a time when relations between EU institutions and member states are already difficult following the breakdown in EU budget talks earlier this month.

A commission proposal, backed by the European Parliament, calling for next year's EU budget to be increased by six percent on 2010 levels was shot down by member states, who finally agreed a 2.9 percent rise should be the limit.

Handing Europe budget and salary increases while EU citizens are forced to swallow tough spending cuts is likely to create tension in some national political circles, with British Prime Minister David Cameron i conscious that such a move would antagonise the more eurosceptic elements within his own party.