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UK faces $2.2bln bill to cover eurocrat pensions – report

Published time: October 16, 2012 10:00
Edited time: October 16, 2012 14:00
A view of the Berlaymont building, headquarters of the European Union Commission in Brussels. (AFP Photo/Dominique Faget)

A view of the Berlaymont building, headquarters of the European Union Commission in Brussels. (AFP Photo/Dominique Faget)

The EU’s bureaucracy is set to grow while the rest of Europe is wracked by austerity measures. UK taxpayers will reportedly fork out an extra $2.2 billion annually for the next seven years to pay for the doubling of pensions for Brussels’ officials.

A confidential letter leaked to The Telegraph also reveals that EU pensions are set to double to more than $3.2 billion a year by 2045.

In addition, it disclosed that the European Commission is requesting a 26 per cent increase to cover the growing costs of the civil service in the proposed 2014-2020 budgets, bringing the cost from $72 billion to $91 billion.

Currently, the EU’s retirement plan for bureaucrats consists of 60 per cent of final salary, which evens out to an annual pension of $91,000. This costs European national governments about $1.6 billion annually.

But, this number is continually growing, as the EU takes on more staff to accommodate its expansion from 15 to 27 countries since 2004.

The leaked letter, signed by the UK and seven other EU countries, also specified that the states are “very concerned” at the rising bureaucracy costs in light of the economic situation and austerity measures in place.

To bring the economy back on track, national public sectors all over Europe had to sacrifice and implement job and service cutbacks, as well as, salary freezes.

The letter argued that austerity burden must be shared by all, including EU officials.

"Most member states are responding to current economic and fiscal circumstances with efficiency measures or other reforms affecting the terms and conditions of their national civil servants. The staff of the European Institutions should share the burden," stated the letter.

Thus far, European Commission has declined to reduce staffing costs.

British EU membership already costs more than $104 billion a year in direct and indirect costs. The new increase in pensions means $15.7 billion extra for the next seven years.

The signatories to the letter also demanded cuts to what they referred to as “gravy train” allowances for EU officials. These give the majority a 16 per cent bonus on top of their salary, which equals out to an additional $321 million for national governments.

The commission has dismissed the letter, arguing that it will only consider requests signed by all 27 states.

Some EU diplomats are encouraging all 27 member states to unite on the issue and demand cutbacks in EU’s staffing costs.

"This is a serious letter, from countries that pay more into the budget than they get back and all there is is radio silence. It is not good enough," one diplomat told The Telegraph.

Bill Cash, the Conservative chairman of the House of Commons European Scrutiny Committee, spoke out on the issue, encouraging UK Prime Minister David Cameron to veto the 2014-2020 Brussels budget unless it guarantees cuts to the EU civil service budget.

"Britain enjoys a veto on the seven-year budget and should use it unless there is a sharp cut in these costs."

Criticism of high and burdensome pensions for EU staff forced the European Commission to respond to the issue this year. However, the commission’s officials stated that the EU pension system has already been reformed and that currently there is no consensus on further changes.

The latest pension bill is contained in 2012 Brussels budget and it already demands a 4.9 per cent increase.

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