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The method decrypted

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Decrypting the METHOD

by Angel SIMON DELGADO , Michael ASHBROOK , Reza FARDOOM


1. How the METHOD sometimes works

Officials remunerations and pensions are governed by the METHOD (references: 1, 2) which is the set of rules based on articles 64 and 65 of the Staff Regulations and the annex XI according to which the Council, acting on a proposal from the Commission (ESTAT), decides our salary adjustments.

Three parameters are used by ESTAT to determine our salary adjustments:

1. Specific indicators : Changes in the purchasing power of salaries of national civil servants in central government

2. Brussels International Index (BII) : Changes in the cost of living in Brussels

3. Correction Coefficient : Economic parities between Brussels and the other duty stations in the Member States

Only the first two of the three points above are applicable to Staff working in Brussels & Luxembourg according to annex XI's Article 3 (5)" No correction coefficient shall be applicable in Belgium and Luxembourg".

"Specific indicators" are related to the principle of parallel development which links our remunerations and pensions to the average purchasing power of a sample of central governments' civil servants. ESTAT is charged to calculate changes in the purchasing power of salaries of these civil servants using data from a sample composed of Germany, France, United Kingdom, Italy, Netherlands, Belgium, Spain and Luxembourg.

Note that the Council, acting on a Commission proposal under Article 65(3) of the Staff Regulations, may adopt a new sample which represents at least 75% of the European Union GDP and which will apply from the year following its adoption. This means that Commission can propose a new sample which theoretically can include more countries but they do not choose to do so. Currently according to ESTAT figures, the sample represents 76.2% of the EU27's GDP.

BII is simply a measure of consumer price inflation in Brussels not to be confused with HICP .

The final factor is equality of purchasing power amongst civil servants in different duty stations except Brussels and Luxembourg. To calculate this ESTAT uses correction coefficients.

The current “Method” is valid from 1 July 2004 to 31 December 2012. It is described in the Staff Regulations as Annex XI. Its legal base is the Council Regulation No 723/2004 of 22 March 2004 (OJ L124 of 27 April 2004) which is binding in its entirety and is directly applicable in all Member States.

arrow Next; Decrypting the METHOD: How the Method sometimes malfunctions

Created by: admin last modification: Friday 21 of November, 2008 [11:16:26 UTC] by admin

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