Ag.14 Eurostat Annual Report overview - A65 elements Doc.A6465/18/05(b) Ag.14 Eurostat Annual Report overview - A65 elements Working Group on Articles 64 and 65 of the Staff Regulations Meeting in Luxembourg 21+22 March 2018

Content of this presentation Reminder of timeline and report structure Reminder who is affected by Annual Adjustment Overview of A65 elements: GSI for sample Components of changes in nominal net salary Comparative and analytical data Do "moderation" and "exception" clauses apply? Closer examination of the figures Annex 2 report

Similar production timeline to previous A year-long exercise! Legal requirements respected 1st Extra-EU report via Ares 12.4.17 (Aug-Jan) Interim report via Ares 18.4.17 (@ 1.January) 2nd Extra-EU report via Ares 22.9.17 (Feb-Jun) Annual report via Ares 24.10.17 (@ 1.July) Annex 2 report available 6.12.17 3

Subsequent steps also similar timeline Since 2013 reform, automatic adoption procedure: Interim report: as part of CC adjustment, only if % change exceeds threshold Annual report: applies Eurostat calculation, followed by: DGHR budget impact report internal administrative processes Council WPSR for information Communication in Official Journal pay slips INTERIM ANNUAL n/a 30.11.2017 13.6.2017 14.12.2017 June (retro) December (retro) 4

Report structure and content 5

Did 2017 Intermediate Reports result in CC changes? Duty stations Changes signalled Intra-EU staff 33 (ie.31) - Pensioners 28 (ie.26) Extra-EU (1st) 145 (ie. 144) 8* + 18 Extra-EU (2nd) 9* + 36 * CC > 100 6

Intra-EU intermediate report structure and content Fourth Intra-EU interim report under Staff Regulations as amended October 2013 Similar transparent content as last year's report, some new tables MAIN TEXT 6 pages 0 tables Annex 1 - SI 5 pages 4 tables Annex 2 - JBLI 3 pages 6 tables Annex 3 - CC 9 pages 5 tables Annex 4 - CC+SI 1 page 24 15 + non sample 7

Extra-EU intermediate reports structure and content 7th and 8th Extra-EU interim reports under Staff Regulations as amended October 2013 Similar transparent content as last year's reports, more explanatory text Period Main text Annex Aug-Jan 4 pages 13 pages 13 tables (6 months) Feb-Jun 11 pages 11 tables (5 months) 8

Annual Report structure and content Fourth annual report under Staff Regs as amended October 2013 Increased transparency (more analysis and explanations) MAIN TEXT 26 pages 10 tables Appendix 1a - SI 34 pages 21 tables Appendix 1b - JBLI 8 pages 4 tables Appendix 1c - CC 45 pages 17 tables 113 pages 52 tables +4 = split 10.1-10.4 +2 = impact SHE +6 = 3x AnnAdj, 5.4a, 5.6+7.2 (PPP)

Annual update 2017 (in Brussels/Luxembourg - and together with CC also everywhere else)   real GSI JBLI AnnAdj "Implicit index" = total price effect = JBLI x PPP change

Who/what is affected by the update Basic salary of permanent officials and other servants (all duty stations) Pensions of pensioners (all places of residence) Various values and ceilings, eg. Household allowance; Parental leave allowance; Child allowance; Education allowance Expatriation allowance (minimum); Foreign residence allowance (minimum) Travel allowance Installation allowance Unemployment allowance

Estimate annual budgetary impact (DGHR) NEW Estimate annual budgetary impact (DGHR) Ch. V Other Ch. Total Expenditure +93.0 mn € +24.1 mn € +117.1 mn € Revenue (tax, etc) -16.3 mn € -4.1 mn € -20.4 mn € Sub-total +76.7 mn € +20.0 mn € +96.7 mn € 12

Any constraints on implementation? Moderation clause (GSI >2%) Exception clause (GDP growth <0%) Was previous year exception clause correct?

Q: Moderation clause applies 2017 ? Calculated SI 1 July Year n 1 April Year n+1 1 -2% ≤ X ≤ +2% 100% - 2 OR ( X < -2% , X > +2% ) (100-a)% a% * a= the proportion of the calculated adjustment using X which exceeds a similar calculation substituting the -2% or +2% ceiling for X 2017 real GSI value is +0.4% ie. situation 1

Q: Exception clause applies 2017 ? Forecast GDP for Year n 1 July Year n 1 April Year n+1 Later* 1 0% ≤ X 100% - 2 -1.0% ≤ X < 0% 33% 67% 3 -3.0% ≤ X < -1.0% 4 X < -3.0% * ie. when cumulative GDP is again positive ECFIN spring forecast +1.9% ie. situation 1 ECFIN autumn forecast not yet published

Q: Exception clause 2016 confirmed ? 2016 Annual Report assessment: situation 1 Staff Regulations requires review against actual 2016 GDP evolution (Eurostat published data) Conclusion: yes, clause was correctly applied

Closer examination of the figures 17

Steps towards the definitive result… Spring forecast (04/17) Actual HICP (09/17) Diff Final report (10/17) [a] [b] [b]-[a] [c] [c]-[a] GSI nominal -0.2 +0.4 +0.6 Inflation +2.1 +1.1 -1.0 GSI realterms +1.9 +0.9 +1.5 -0.4 18

Components of nominal country SI 2017 MS Gross SI comment Stat. ded. ► Net SI BE +2.0 'spilindex' May 2017 0.0 .. DE +4.3 ▲ Mar 2016 (retro); ▲ Feb 2017 -0.6 +3.7 ES +1.0 Budget law 48/2015 paid 2016 -0.1 +0.9 FR +2.9 'majoration' Feb 2017; FPN grades +2.3 IT +0.0 +0.7 LU +1.8 Indexation Jan 2017; modify allow. New tax scales +3.8 NL -1.0 Sep.2015 not repeated -0.5 -1.5 AT +1.3 ▲ Nov 2016 -0.2 +1.1 PL +1.5 New multipliers 'catchup' Rod.500 +3.0 SE +0.4 multiple local agreements UK average 5 departments +1.4

Estimate of total impact (AA, PCR, etc) Component Nominal Impact 1 Change to Gross Remuneration (July 2017 Ann.Adj. in Brussels) + 1.5 100% 2 Change to Pension Contribution Rate (July 2017 = July 2016 = 9.8%) 0.0 70% 3 Change to Health insurance (= 1.7%) 4 Change to Accident insurance (= 0.1%) 5 Change to Personal Income Tax (scale) 6 Change to Special Levy (= 6.0%) 50% TOTAL

Comparative data Indicator Nominal Real 1 Net EU11 +1.9 +0.4 2 Tab. 1 2 Net EU 11 AD +2.2 +0.6 Tab. 1.1 3 Net EU 11 AST +1.6 +0.0 4 Net EU 11 SC +2.3 5 Net EU28 +2.4 +1.0 6 Gross EU11 +2.0 +0.5 7 Gross EU11 CI – CoE +2.5 Tab. 1.6 8 Gross EU11 CI – LCI +0.3 Tab. 1.7

Structure and content of "Annex 2“ report (…from SRQ to CSI) Doc.A6465/18/03 Structure and content of "Annex 2“ report (…from SRQ to CSI) Annex 2c (34p) Summary tables with information for EU28 Annex 2a (107p) Detailed tables for 14 countries (BE to LV) Annex 2b (118p) Detailed tables for 14 countries (LT to UK)

Links to other presentations in agenda Agenda point 5 - A64 content Agenda point 7 - international collaboration Agenda point 16.1 - lessons from annual exercise Agenda point 16.2 - assessment 2014-2017 Agenda point 15.1 - dissemination Agenda point 17 - transparency consultation Agenda point 22 - documents for public 23

Thank you for your attention!