With inflation raging across Europe, European Commission staff likely cheered upon receiving an automatic salary rise.
The only catch: Such wage increases go against the Commission’s own advice to governments and social partners.
Commission staffers in Belgium and Luxembourg, including members of the College of Commissioners, got a 2.4 percent pay hike in June, applying retroactively from January, the Commission confirmed.
The total increase in the Commission’s labor costs amounts to €95 million for 2022, a Commission spokesperson said. The adjustment also affects the deductions paid by officials back into the EU budget, bringing the net budgetary effect to €78 million, the spokesperson added.
The spokesperson described this as an “automatic calculation without any political discretion.”
However, the adjustment contradicts the EU executive’s own advice on wage setting. It has long opposed the so-called automatic indexation of wages to inflation on the grounds that doing so triggers wage-price spirals and pushes inflation even higher. Many EU countries abandoned the practice after the stagflationary 1970s, with only Belgium and Luxembourg continuing the practice.
“[An] important element for inflation not to become entrenched is to avoid price wage spirals and correspondingly there’s also a substantial responsibility of social partners to find the right balance,” Commission Executive Vice President Valdis Dombrovskis said last month.
Under EU staff rules, salaries are adjusted annually to account for changes in living costs. But this can happen twice a year and apply retroactively if inflation has risen above 3 percent in the reference period, which is what happened between July and December 2021, when inflation in Belgium and Luxembourg averaged 3.5 percent.
This indexation is then adjusted for changes in purchasing power of national civil servants in 10 EU countries — Belgium, Germany, Spain, France, Italy, Luxembourg, the Netherlands, Austria, Poland and Sweden. That figure declined by 1.1 percent over the same period, which resulted in the final 2.4 percent adjustment. Commission staffers in countries other than Belgium and Luxembourg also got a pay raise, but this is weighed according to national circumstances.
“This system does not aim to index salaries according to the inflation but to keep the evolution of the purchasing power of EU civil servants in line with those of national civil servants,” the Commission spokesperson said.
A leading lobby for unions, which have been calling for increasing salaries in line with core inflation, welcomed the move.
“The same system of indexation should be applied to all European workers, and the Commission should clearly recommend it to member states, knowing that wage depression leads to economic recession,” European Trade Union Confederation Secretary General Luca Visentini said in a statement. “We couldn’t agree more!”