Correction coefficient for Luxembourg: myth or reality? 3/4

In our 2 previous communications, we highlighted the real situation on the ground (approximately 30 places where staff are assigned in the EU have a correction coefficient or CC) and the legal bases in the Staff Regulations that underpin that practice.

1. What about the budgetary cost of a CC in Luxembourg?

Based on estimates, this CC in Luxembourg in 2016 would be approximately 8.1% (cfr. the CC approved for EFTA).
This means that the purchasing power of EU staff assigned to Luxembourg is 8.1% less compared with their colleagues working in Brussels.
Bearing in mind the monthly payroll: 80 million € (all institutions combined), the annual cost could be estimated at 77.8 million € per year, but as its scope could be limited by specific arrangements, the budgetary impact could be reduced to 2/3rds of that amount, i.e. about 50 million €, or probably even less.


2. Does Chapter V of the Multiannual Financial Framework (MFF) contain the necessary funds to pay for a CC in Luxembourg? YES ... DEFINITELY

The MFF 2014-2020, which already assumed a reduction of billions of euro in administrative and operating expenses (staffing reductions, freezing of careers, revision of pension parameters, etc.) has continued to suffer further cuts in every annual budget since 2014.
Which means that hundreds of millions of euro from Chapter V will not be allocated (and therefore transferred to other policies), despite the margin allowed by the MFF.
That was the case in 2014 (-126 million €), 2015 (-458 million €), 2016 (-574 million €) and 2017 (-596 million € cfr. draft budget), making a total of: -1,754 million €.

So it is extremely difficult for staff to understand the budgetary argument, if one compares the unused appropriations in Chapter V (1,754 million €) with the theoretical cost of a CC in Luxembourg, which would cost a maximum of 50 (fifty) million € per year.


3. Conclusion

Budgetary resources far in excess of what is needed to finance a CC in Luxembourg are available.

The main obstacle is political.


4. How should the staff react? What do we have to do? What is Union Syndicale Luxembourg proposing?

That will be the subject of our 4th and last communication on this subject: after that, we need to go into action.


Kind regards,

Miguel Vicente Nunez
Président USL