Brussels row over 3.7% EU salary rises

A row has broken out in Brussels over plans to raise the salaries of tens of thousands of EU staff at a time of deep economic crisis and public sector wage cuts across Europe.

In a public relations disaster for Brussels, an army of eurocrats is in line to receive a 3.7 per cent pay rise and is threatening strike action next week unless it goes ahead. But now Britain, Germany and a raft of other EU countries have launched a last-minute battle to block the increase for nearly 45,000 civil servants, arguing that it is out of step with the downturn.

Just this week, Chancellor Alistair Darling said British public sector staff would face a two-year pay cap from 2011, while the Irish government announced deep cuts in the sector, with Prime Minister Brian Cowen shaving a fifth off his own salary. The belt-tightening has been particularly severe in the Baltics, where teachers and hospital workers have seen their salaries plummet by up to 20 per cent in the past months.

“It would send out completely the wrong signal to go ahead with the rise at this time. It would portray Brussels as a gravy train of fat cats that keeps on rolling while everyone else is tightening their belts,” said one ambassador from a nordic EU country. EU civil servants earn up to €168,000 (£151,000) per year net and enjoy other allowances and generous pension schemes.

Quizzed on the issue during a summit of EU leaders in Brussels yesterday, Gordon Brown said: “Obviously everyone is of the view that pay settlements have got to be reasonable at this time.”

However, the challenge by 20 out of the block’s 27 governments could unleash a bitter legal wrangle as it would break a time-honoured method that member states have themselves endorsed. The calculations take into account the wage increase of national civil servants in eight EU member states and the cost of living in Brussels, based on figures from the previous year. “We’ve never managed to overturn this rule in the past,” another EU diplomat said, referring to the oil crisis of 1972 when member states lost a case against the European Commission.

EU officials and unionists are bristling at the accusation that they do not deserve the wage rise and say they plan to disrupt voting sessions at the European Parliament in Strasbourg next week as well as European Council meetings.

“We are the perfect target for populists because we are seen as being some kind of spoiled elite. We will get a rise now but next year we’ll face big cuts as our salary will reflect what’s been happening across Europe this year,” says George Vlandas of the EU for U union in Brussels. “We are completely in the legal right. And we are prepared to take this to the European Court of Justice if it goes that far and we know we will win because the rule is as clear as day.”

European Commission President, José Manuel Barroso, acknowledged that closed-door negotiations had not yet broken a deadlock and reminded reporters on Friday that “rules have to be respected”.

Officials believe that the Council will eventually be forced to accept the pay increase this year but they fear that governments will try to renegotiate the method early next year.