Kinnock reforms to trigger battle over officials’ perks

Date: 20/01/2000

By Simon Taylor

EU GOVERNMENTS will demand a review of European Commission officials' perks as their price for supporting Vice-President Neil Kinnock's radical plans to reform the administration's working practices.

EU diplomats say member states will push for an end to some of the special benefits officials now enjoy as part of the fundamental overhaul proposed by Kinnock this week. "That is where the real debate will take place", said one.

The strongest calls to scrap some of the current entitlements are expected to come from paymaster countries such as Germany and Nordic member states, where public opinion is highly critical of the low rates of tax paid by civil servants in the EU institutions. The issue sparked a furore in Finland last year when it was revealed that the head of the Commission's office in Helsinki earned more than the prime minister.

But Kinnock fears that any attempt to cut officials' perks at this stage could undermine his efforts to win the staff unions' support for his reform package, sparking confrontation at a time when cooperation is needed to implement the wide-ranging changes he has proposed.

In a bid to fend off the challenge, he has promised to defend existing pay and conditions against attempts by governments to cut the Commission's wage bill, insisting: "General conditions of employment of Commission staff should not deteriorate."

Senior Commission officials say Kinnock will propose extending the current staff pay and pension arrangements, which are due to expire in 2001, for a further year to prevent the reform process from getting bogged down in arguments over salaries and perks.

EU diplomats insist that the planned attack on benefits is not aimed at reducing officials' overall package, because this would leave the Commission unable to compete with pay rates in the private sector. However, they argue that there is a good case for scrapping some perks. "Some of the allowances are anachronistic. Even the Commission sees that some elements are very easy to attack and could be got rid of," said one.

Under the current system, officials in all the EU institutions receive extra allowances on top of their overall salaries, including a 16% expatriate allowance, a 5% housing allowance and monthly entitlements for each child and the cost of their education. Officials pay tax at a rate between 8% and 45%, depending on the level of their overall salary.

Predictions of a looming battle over perks came as Kinnock unveiled an 84-point action plan for Commission reform, describing it as a strategy for modernisation which was "thorough, practical and radical".

The blueprint is designed to address the shortcomings exposed by the committee of wise men which led to the Santer Commission's downfall last March. "The aim is to make changes which will ensure that efficiency, accountability, transparency, responsibility and service are applied to working conventions everywhere in this unique administration," states the paper.

One of the main planks of the reform strategy are changes designed to stop the Commission being overloaded with tasks it is not properly equipped to perform. A new system of financial controls and a fundamental overhaul of staffing policy are also seen as crucial to bring about a change in culture.

Kinnock's plan has been warmly welcomed by MEPs who set in motion the chain of events which led to last year's Commission crisis. Irish MEP Pat Cox, Liberal Group leader and one of the previous Commission's strongest critics, praised the willingness of the new administration to bite the reform bullet. "The admission that a sea change was necessary is a fundamental difference between the old and the new Commission," he said.

Staff unions, which went on strike two years ago in protest over less radical attempts to overhaul working practices, gave a muted response to the proposals but warned that the package might be too ambitious.

EU governments will demand a review of European Commission officials' perks as their price for supporting Vice-President Neil Kinnock's radical plans to reform the administration's working practices.