Portfolio blogger

Tuesday, February 26, 2013

National sentiment and European Myth(s)

In a previous post I already talked about national sentiment. In the European Voice Tim King argues that the big disadvantage of Europe to the U.S. is the lack of common myths. His point is that even the rise of Europe from the second World War which he likens to the rise of the U.S. from the Civil War, is interpreted differently by different groups of European people. Nothing illustrates his point more than the debate (or I could rather call it non-debate) about the pre-war years in Hungary. In the Basic Law (replacing the Constitution) the ruling FIDESZ fixed that Hungary was not independent (using a term which suggests the exclusion of all responsibility) from the 19th March 1944 till the first democratic elections in 1990. The time before the German occupation is depicted as the ideal world. I.e. all responsibility for what happened to the Jews, the Roma, the political enemies, is declined. On the other hand, squares and streets are named after Horthy and statues are erected. In the abbey of Pannonhalma a bust of prime minister Teleki, the promoter of the first "Jews' law", the "numerus clausus" in universities, was erected. Horthy and the system is even credited with protecting the Jews and introducing the limitations, their expropriation as necessary to protect their lives. Some simply only talk about the period under the prime ministership of István Bethlen, who consolidated the country by taking a loan from the League of Nations (as the IMF is a specialised organ of the U.N., practically the legal predecessor of IMF), although the scandal of a large-scale French franc forgery also was in this period. The centre operating the schools now, a huge administrative organisation, is named after Kuno Klebelsberg, whose ambition was to overtake the neighbouring nations by educating the people better. He had a concept but this is somewhat antiquated in the 21st century. And these are the softer variations. However, these are the really dangerous ones as it is more difficult to counter their half-truths. In particular as these false myths are set up to feed national pride while it is much more difficult to present the complex reality in a way that it should also be emotionally appealing. A balanced narrative about what happened, how the treaties closing the first World War contributed to the second and how Europe was able to get over its divisions, would already be a big achievement. Maybe this could over time give rise also to a myth...

Saturday, February 2, 2013

Salaries of officials

The fight around the EU budget and the salaries of eurocrats continues. It has yielded some very interesting side-branches. A huge proportion of the EU budget is going back to the member states, although not to those who pay them in (The Guardian tried to set up a flowchart showing where the money goes but of course the euros (and pounds and kronas) are not earmarked. However, there are net payers (the richer countries) ant net recipients (who actually spend a significant part of the money received in the richer states), as one aim of the EU is to equalise the level of development in its members - out of solidarity but also out of plain self-interest. No one of the states will openly tell another one "I do not want to pay for you" although citizens and some journalists - in particular in the context of the debt crisis - do say things like that.

So what remains is the administration. Without echoing the allegations of the staff unions who see an intention to weaken the European public service, and without denying that efficiencies can be gained (where can't they?), this endeavour is not well placed in the eyes of an impartial observer (which I am not). The 2004 reform brought huge savings and the Commission is now proposing a further cut of 5% in staff numbers (and to reallocate staff internally to fulfil new tasks coming from accession, the economic governance package and a number of other projects aiming at competitiveness for Europe, research, etc.) as part of a wider package to cut other benefits of the officials (which are fixed in a regulation voted by the Council and the European Parliament). Negotiations on this proposal stalled as the member states did not accept the proposals. The EU budget is about 1.3% of the total GDP of Europe and administration is less than 6% within this. So big savings cannot be expected.

Salaries of eurocrats seem to be a stumbling block. In 2004, a special levy (starting at 2.5% and increasing every year till 5.5%/ was introduced on top of the taxes and social security contributions paid by the officials. This was tied to a method of calculating the annual salary adjustments. This method tied the increase of the salaries to the increase of salaries of public servants in the richer member states (to avoid that the increases in the member states due to higher inflation and the catch-up effect, as salaries there were lower than in Western Europe, should result in a higher increase). Of course the data have first to be available and so the changes take effect a year later. So after the crisis, there was still one year where the salary increase fell out higher than the member states thought justified (surprisingly, not in 2008 but in 2009) and then the member states did not want to apply the algorithm, referring to an exception clause in the regulation, for the case of an unexpected and serious crisis. The Court of Justice later found that that year the crisis was not sudden and not severe enough in its consequences to justify the application of the exception clause. The year after the cut in national public salaries had its effect on the calculation and the 0.1% increase was approved by the member states. The year after, they refused to apply the method again, and similarly in 2012.

Meanwhile, the method of salary adjustment and the special levy expired (they were tied to each other). The Commission proposed to extend these two elements of the staff regulations for another year, independently from the status of the negotiations on the budget and the Staff Regulations. The Council refused that which meant that the special levy (which gradually increased to 5.5%) also expired and all officials of the European institutions got a salary increase of about 5.5%. This was pinpointed in a number of articles in the press. One of them got a surprising reaction from a European Official who stated that he/she is a secretary and earns 700 euros a month. As the salary table of the officials is public, it is easy to establish that this means at least a grade 8 official. Given that secretaries start at grade 1 and the average time to jump a grade is 3-5 years (in reality, it can be longer), this means that this person works in the EU since 20-30 years and is still a secretary. Draw your own conclusion. If you want to see the Staff Regulations, you can find it here

By the way when member states - and in particular David Cameron, outraged about EU salaries compared to his own - complain about 1-2% of salary increases and "perks" of EU officials, Commonwealth officials received a 3.8% salary increase and have much more sumptuous perks - but this is Britain's favourite child, as opposed to the EU.