EU Commission set to cut already strained personnel as inflation bites

by Luca Bertuzzi

The EU public administration, torn between growing ambitions and a stagnant budget, faces yet another obstacle – inflation – with temporary staff set to pay the highest price.

The European Commission has recently raised the salaries by 2.4% retroactively from the beginning of the year. The salary increase results from so-called ‘actualisation’, an adjustment based on the decreased purchasing power of civil servants from a sample of 10 European countries.

However, inflation is much higher in Belgium (4.1%), where most Commission staff are based. Still, these extra wage costs will strain the EU executive’s administrative budget, which is decided annually. Thus, extra costs will have to be proportionally offset with cuts in expenditure.

That often takes the form of a ‘negative priority’ – asking the Commission departments not to replace permanent members of staff who are retiring or not to renew expiring contracts for temporary staff. Even those who passed the public competition EPSO, meant to lead to permanent jobs, are having a hard time getting hired.

Rising expectations, fixed budget

“Some empty positions will probably stay empty for a while. That will probably accelerate a trend that currently exists (even without inflation), consisting in replacing expensive agents with less paid, more precarious ones,” said Juan Pedro Perez-Escanilla, former secretary-general of the trade union USB.

The use of contract agents grew in the previous financial period (2014-2020) when EU institutions were required to cut their costs by 5%. In 2022, contract agents are the second most common type of Commission staff, accounting for 23% of the total.

In the EU’s new seven-year budget, administrative costs have remained stable while the European Commission’s tasks keep growing. “There are increasing expectations from the member states, while there is more and more pressure on the human and financial resources,” a Commission source said.

Inflation is bound to further increase that pressure, with the temporary staff set to bear most of the cuts.

Six Commission sources told EURACTIV on condition of anonymity that their department is either considering freezing the hiring of new staff members or has already done so.

Temporary staff freeze

Contract agents are underpaid compared to permanent staff, who might earn up to four times more for the same position but with more years of service. Therefore, compensating for the extra salary costs might result in cuts of temporary staff three times higher than the salary rise.

The need to reduce costs has not been officially communicated, but indiscretions have been circulating more or less openly. At the same time, the industry is hiring Commission experts aggressively.

“The situation is so critical that they had to block the employment of contract agents, and it is even hard to renew expiring contracts,” one of the Commission sources said, asking for their department not to be named due to the sensitivity of the situation.

In another directorate general, management looked for ways to make the resource allocation “more efficient”.

In a third Commission service, a senior manager admitted in a staff meeting that cuts to the staff had been taking place before the salary actualisation but that the situation is bound to get worse now, especially if inflation keeps rising and the salaries need to be increased again.

In yet another Commission department, a senior official told staff members they were having problems with HR because they had hired more than the allocated spots for temporary staff.

Related problems

The high turnover rate is also starting to be a continuity problem, as the same file is handed over every few months.

One of the sources explained that the management in their department preferred to hire one permanent civil servant rather than two contract agents to ensure they can keep the same person in the medium term.

The Commission has been trying to fill in these gaps via national experts provided by the member state governments, as they bear zero costs for the EU institution. A second Commission source said it had direct experience of at least two directorate generals increasingly using national experts.

Still, experts from the capitals can be a hit or miss, according to a third source, as they can be out of touch or their availability cannot always be planned. Moreover, placing national experts inside the Commission gives member states more means to influence EU policy-making.

Policy implications

According to a fourth source, the burden will not be shared equally across the different departments but based on internal status and political priorities.

Although the Green Deal ranks at the top of the EU agenda, the directorates general for climate change, environment, and energy are expected to be among the most affected, despite already being severely understaffed.

On digital policy, the Commission is under pressure to deliver on the enforcement of the recently agreed Digital Markets Act, meaning resources will need to be reallocated from other parts of the European public administration.

“The enforcement of the DMA is estimated to require approximately 80 staff who would be redeployed internally, as appropriate,” a Commission spokesperson told EURACTIV.

On Tuesday (28 June), a group of civil society organisations called on the European Parliament to push for additional resources to implement the DMA as EU governments will decide on next year’s budget in October.

Still, the reluctance of member states to give away more powers and resources to the Commission is a recurring theme in EU decision-making.

For instance, a discussion paper of the Czech Presidency on the AI Act, obtained by EURACTIV, stated that the option of moving part of the enforcement into the hands of the EU executive has “considerate practical and financial implications”.

*first published in: www.euractiv.com