Sword of Damocles hangs above the Parliament if it does not embrace change

Date: 02/07/1998

Voter rebellion could threaten the credibility of next year's European elections if MEPs do not cut the Gordian knot of expenses, travel costs and 'Spanish practices'. Rory Watson reports on moves to reform the institution before EU citizens go to the polls in June 1999

ALL members of the European Parliament are equal but it seems that some are more equal than others.

Place a Greek representative alongside an Italian and it does not matter how industrious or lazy either is - the annual salary of the MEP from Rome will be more than three times that of the elected representative from Athens.

There is a certain logic in this anomaly. MEPs' salaries are paid by their own governments and so, for the past 20 years, there has been understandable pressure to ensure parity between a country's politicians and its Euro-parliamentarians.

It would have been unthinkable for national deputies to vote in a higher salary for their European counterparts just because they happened to meet in Brussels and Strasbourg.

But the huge differences in income have created resentment in certain quarters and have nurtured a policy of tacit acceptance that parliamentary allowances are used to top up lower salaries.

This has been made possible by the system used to reimburse members for their travel costs. The refunds are based on a kilometre rate, not on the actual cost of a journey so that, with judicious use of PEX or APEX tickets, refunds can be a lot higher than the price paid. With competition between airlines increasing, the cost of business class tickets is also well below the rate.

There is nothing illegal in this practice and many members, particularly in the Union's more far-flung constituencies, use leftover funds to cover taxi and overnight hotel costs on the way to and from Brussels or internal travel within their constituencies when, as in the case of British members for instance, this is not refundable.

That may now be about to change, with the pressure for reform coming from different directions.

The EU's financial watchdog, the Court of Auditors, has criticised the present arrangement and highlighted what it believes are failings, although it has not provided examples of fraudulent use of the allowances system.

At the Cardiff summit last month, EU leaders were uncharacteristically critical of the Parliament's internal housekeeping, insisting that it was essential for the institution's image to be cleaned up.

Unless this can be done and, more importantly, be seen to be done, they fear that parliamentary candidates will face apathy or even hostility from the electorate during next summer's elections. "If changes are not made, the danger is that financial issues will dominate policy issues in the European elections," warns one senior official.

EU leaders fear there could be wider repercussions and that a continued media and public fixation with MEPs' salaries and allowances could undermine their stated objective of bridging the gap between the public and Union institutions.

There is also pressure for change from within the Parliament, particularly from the Socialists, Radicals, Greens and United Left. What was previously tolerated is now felt to be untenable. "You cannot have a defective travel system in order to remunerate members," insists one long-standing MEP.

Some members believe that a single statute setting out common legal responsibilities, rights, duties and a common salary for all 626 MEPs is the only way to solve the problem. Previously considered a somewhat unrealistic goal, it is now felt to be achievable and even desirable if pay discrimination based on nationality in one of the EU's main institutions is to be ended.

The idea is firmly anchored in the Amsterdam Treaty and a draft statute is now being examined by senior MEPs and political groups in the hope that it can be approved by the Parliament in the autumn. The proposal would then pass to EU governments, which would have the final say on its contents.

The author of the 15-article draft, British Socialist MEP David Martin, believes the statute is crucial for the reform process and that his view is now more widely shared." The reality is that without a common salary, we will never reform allowances here," he says. "I have to say that when I was asked to do this six months ago, I thought it was likely to be an academic exercise. But now there is political pressure to do this."

The statute would lay down the general principles which would have to be satisfied for a person to be an MEP and exercise a parliamentary mandate. It would also establish the broad terms of the allowances, social security and pension systems. If it were adopted, for example, the controversial voluntary pension fund for MEPs would be sealed off and a fresh one established.

Martin, determined to avoid becoming entangled in the salary debate, insists that it would be EU governments, not the Parliament, which would set the level of MEPs' pay. His draft merely suggests that the statute should establish the salary at an unspecified percentage of the income enjoyed by a judge in the European Court of Justice: the standard bench-mark.

His caution is understandable following the criticism prompted by revelations that the covering letter attached to the draft statute confirmed that calculations had been made indicating that "salaries between 9,000 ecu and 12,000 ecu per month per member might be feasible".

Under the plan, MEPs' salaries would be paid from the Parliament's own budget. That in itself could be an incentive for member states to agree the move. In Germany, for instance, it could mean savings of up to 9 million ecu.

The figures in the covering note were intended to indicate how much could be afforded from 1999 onwards as the institution's heavy expenditure on buildings begins to fall. Now, Martin and other MEPs are keen to distance themselves from such sums.

The near impossibility of agreeing a rate for the job which would satisfy all MEPs and governments alike is forcing reformers to look for ever more complex formulae. "What we want to stress is that this is not just about pay levels of MEPs but about getting a reasonable overall package," says one member.

Martin is suggesting that a 'coefficient' could be applied to a basic figure, which would take account of the cost of living in different member states, just as the European Commission does when calculating the salaries of officials stationed outside Brussels.

Danish Liberal MEP Bertel Haarder, who successfully won strong parliamentary backing for the first time last week for a common statute and a reformed allowances regime which reflected actual costs, is advocating a different system.

"I propose a temporary 'Bruxelles compensation' for MEPs with low salaries, financed by reforms to the travel allowance and the general expense account," he says.

"Compensation should ensure a minimum payment for all members. The minimum payment could be the average salary of the MEPs, or we could ask a group of wise men and women to suggest a mechanism to fix the minimum."

Haarder is realistic enough to recognise that the statute, which supporters would like to apply to the new Parliament to be elected next June, might not be approved by EU governments in time.

But he insists allowances must be reformed before voters go to the polls.

"Even if we do not get the common statute by then, we have to change the expenses here and now. The second is no longer conditional on the first. Continuation of the present situation would be to the detriment of all members," he insists.

That spirit of reform is beginning to echo throughout the Parliament - although too slowly for some members - as the bureau which decides the assembly's business and the legal and rules committees examine possible changes.

In the pipeline are moves to clarify the status of MEPs' assistants, to lay down clearer guidance on what outside interests members should declare and when, and to ensure more rigorous implementation of rules on the conduct of lobbyists inside the Parliament.

The degree of enthusiasm and efficiency with which the Parliament tackles these reforms will ultimately determine its standing with the public. If it fails to embrace change, say critics, it will have no one to blame but itself.

Major feature on the need to reform the European Parliament.