Kinnock wins backing for pay ‘roll-over’

Date: 09/11/00

By Simon Taylor

EU GOVERNMENTS have agreed to extend the current system for setting European Commission officials' pay and pensions until 2003, giving Vice-President Neil Kinnock's administrative reform plan a vital boost.

Officials working on the reforms say a majority of member states - including several of those which were originally most sceptical about the idea - now support his calls for the existing method to be 'rolled over' for two years. These include Germany, the UK, Denmark, the Netherlands and Austria.

Kinnock's aides say he has won the argument by promising that the overall reform package will stay within strict cost limits and that he will ensure the proposals he has already published are implemented in full. Sceptical member states also demanded an assurance that a proposed early retirement scheme for Commission officials would be taken up by the planned number of long-serving officials.

"The roll-over of pay and pensions is nearly in the bag but Kinnock has to deliver on reform," said one diplomat.

French presidency officials said finance ministers would formally agree to extend the current system, which was due to expire in the middle of 2001, at a meeting at the end of this month.

Kinnock has argued that he needs a two-year grace period before starting negotiations on a new system for setting pay and pensions to ensure that progress on the rest of the reform package is not hindered by disagreements over the sensitive issue of officials' salaries.

"The roll-over of pay and pensions is not a delaying tactic of any kind," he told a group of German national parliamentarians last month. "To those who want negotiations to start now, I can only say that any very short-term and limited benefit which that might bring would be offset by the huge costs of missing a unique opportunity to really reform the system and to do so without great delay."

Under the current system, known as the 'method', the pay and pensions of Commission staff are calculated on the basis of the average rate of pay for civil servants working in national administrations. In his speech to German MPs, Kinnock dismissed the argument that Commission officials were paid too much. He said a recent comparison of pay scales for international staff in Brussels showed that civil servants in the executive earned less than their peers in multinational companies and staff in member states' permanent representations to the EU.

He added that the Commission was finding it difficult to recruit qualified young German staff because the package was not attractive enough. German Finance Minister Hans Eichel has been one of the strongest voices calling for changes to Commission officials' terms of employment, arguing that the pension scheme is too generous.

EU governments have agreed to extend the current system for setting European Commission officials' pay and pensions until 2003, giving Vice-President Neil Kinnock's administrative reform plan a vital boost.