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European Commission headquarters in Brussels


Eurocrats, the cosseted class of civil servants who staff the European Union, are poised to suffer salary squeezes and job losses as part of the bloc's forthcoming multi-year budget.

Eight northern member states, including the U.K., have written to the Commission, the European Union's executive arm, demanding "very substantial reductions" in spending on salaries, pensions and benefits as part of the next budget plan.

Their plea comes at a time when the Commission, itself, is mulling job cuts that could trim as much as 5 per cent of EU staff, according to people familiar with the matter.

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Those cuts, along with longer working hours and other administrative reforms, are to be announced next week when the Commission presents its proposal to guide spending in the bloc from 2014 through 2020, known as the multi-annual financial framework.

EU salaries and benefits have long been a lightning rod for controversy, with critics - particularly those who are hostile to the bloc - complaining that functionaries are over-paid and under-worked.

The issue made headlines last year when a convoluted labour contract gave roughly 45,000 EU workers a 3.7 per cent annual pay increase in the midst of an economic and financial crisis that was forcing national government to impose savage and unpopular austerity measures at home.

It could become particularly charged again at a time when taxpayers are being called on to fund another multi-billion-euro bailout package for Greece, and the crisis shows no sign of letting up.

"It is important to remember the constraints resulting from the consolidation efforts following the economic and financial crisis which we all face," said a paper prepared for the commission by the U.K., Austria, Denmark, France, Germany, the Netherlands and Sweden. "European administration spending cannot be exempt from the considerable efforts made by the member states to reduce their administrative expenditures."

The countries are calling for a host of changes when the current labour contract expires after 2012, including more flexibility to adjust salaries in times of crisis. They also suggest raising retirement ages, taxing pensions and abolishing a special index that was designed to track the cost of living for international workers in Brussels.

The commission is well aware of the popular outrage that EU benefits have provoked in the past, and does not want the issue to distort what already promises to be a difficult debate about spending. As such, it is eager to demonstrate through its own proposals that it is clamping down.

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Privately, though, many commission officials bristle at characterizations of the EU as a gravy train. A 2004 reform, they say, already wiped out many of their perks, while the bloc has increasingly turned to contract workers with fewer benefits to fill its ranks.

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