1. Ag.no.05 Eurostat Annual Report overview - A64 elements
Doc.A6465/18/05(a)
Ag.no.05 Eurostat Annual Report overview - A64 elements
Working Group on Articles 64 and 65 of the Staff Regulations
Meeting in Luxembourg March 2018

2. Content of this presentation
Reminder of timeline and report structure
Reminder who is affected
Overview of A64 elements in report:
JBLI
CC for Intra-EU staff
CC for Pensioners
CC for Extra-EU staff
Link to other presentations in WG agenda

3. Similar production timeline to previous
A year-long exercise!
Legal requirements respected
1st Extra-EU report via Ares (Aug-Jan)
Interim report via Ares January)
2nd Extra-EU report via Ares (Feb-Jun)
Annual report via Ares July)
Analytical categories report onto website

4. Subsequent steps also similar timeline
Since 2013 reform, automatic adoption procedure:
Interim report: only if % change exceeds threshold
Annual report: all values are updated
Eurostat calculation is followed by:
DGHR budget impact report
internal administrative processes
Council WPSR for information
Communication in Official Journal
pay slips
INTERIM
ANNUAL
n/a
June (retro)
December (retro)

5. Report structure and content

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
See A65 discussion

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. 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

9. Annual Report structure and content
Fourth annual report under Staff Regulations as amended October 2013
Similar transparency content to last year's report, some new tables, minor format improvements
MAIN TEXT pages 10 tables
Appendix 1a - SI pages 21 tables
Appendix 1b - JBLI pages tables
Appendix 1c - CC pages tables
113 pages 52 tables
See A65 discussion
+2 = impact SHE
+6 = 3x AnnAdj, a, (PPP)

10. Who/what is affected by the JBLI
Remuneration in Brussels/Luxembourg (+ everywhere) of:
Active EU staff (permanent, temporary, contract) of EU institutions - eg. in EU Representations, Joint Research Centres, Extra-EU Delegations - and of EU Agencies
Seconded teachers at European Schools
Retired EU staff, plus transfers into/from EU pension scheme
By collaboration:
Staff of other international organisations (UN, OECD, EPO, EuroControl, EIB, ECB, …)

11. Who/what is affected by the CC
>400,000 people
Who/what is affected by the CC
Remuneration outside Brussels/Luxembourg of:
Active EU staff (permanent, temporary, contract) of EU institutions - eg. in EU Representations, Joint Research Centres, Extra-EU Delegations - and of EU Agencies
Seconded teachers at European Schools
Retired EU staff, plus transfers into/from EU pension scheme
Other:
Researcher mobility under FP7; Education mobility under LLL (LdV, Comenius, Eurasmus);
Equalisation coefficients in Joint Sickness Insurance Scheme;
Mission expenses (DSA and hotel ceilings)
By collaboration:
Staff of other international organisations (UN, OECD, EPO, EuroControl, EIB, ECB, …)

12. Numerical example (constant PPP fluctuating XR)
NB. Only PPP component of CC is relevant: exchange rate impact cancels out
CC = PPP ÷ ER so it can be noted that when Euro salaries are paid in local currency and have the CC applied to them, the exchange rate impact is effectively removed to leave only the price level impact, as can be seen in the following diagram.
Salary in Brussels
(in Euro)
Exchange rate
(Euro to currency)
Correction coefficient
(= PPP ÷ Exchange rate)
Salary in duty station
(in currency)
Numerical example (constant PPP fluctuating XR)
1000 EUR x 77.1% (= / 4.160) x = local
1000 EUR x 71.2% (= / 4.500) x = local
1000 EUR x 82.2% (= / 3.900) x = local

13. Annual update 2017 (outside Brussels/Luxembourg)
Real GSI %
PPP change %
JBLI %
AnnAdj %
"Implicit index" = total price effect = JBLI x PPP change

14. Estimate annual budgetary impact (DGHR)
NEW for PPT
Estimate annual budgetary impact (DGHR)
Ch. V
Other Ch.
Total
1st Extra-EU interim report CC
+0.20 mn € ..
Intra-EU interim report CC
2nd Extra-EU interim report CC
+0.90 mn €
Intra-EU annual report CC
+2.80 mn €
+1.60 mn €
+4.40 mn €
Extra-EU annual report CC
-0.04 mn €
Sub-total
+3.86 mn €
+5.46 mn €

15. Joint Belgium-Luxembourg Index
Main report
Table 3 (COICOP 12-groups)
Appendix 1b
Table 3.1 & 3.1a (Belgium HICP dwell.wgt)
Table 3.2 & 3.2a (Luxembourg CPI dwell.wgt)
Staff numbers in Brussels and Luxembourg
In red = new this year

16. Calculating the Joint Belgium-Luxembourg Index
Brussels
FBS
80BH
Brussels
BXL/LUX
c.80%
JBLI GLOBAL
EU staff t0
Belgium
BXL/LUX
HICP 80BH
JBLI 80BH
Luxembourg
CPI 80BH
Luxembourg
Calculating the Joint Belgium-Luxembourg Index
c.20%
EU staff t0
Eurostat

18. Elements of JBLI change 2016-2017
Reweight HICP Belgium (nat→BXL, incl. owners) ► = -0.4 x 80% Reweight CPI Luxembourg (nat→BXL, incl. owners) ► = -0.2 x 20% = -0.36

19. Intra-EU staff Main report Appendix 1c
In red = new this year
Intra-EU staff
Main report
Table 5 (2017 CC = 2017 PPP ÷ 2017 XR)
Table 4 (2017 PPP PPP + % change PPP)
Appendix 1c
Table 4.3 (decomposition of % change PPP)
Table 4.1 ( group PPP + WGT)
Table 4.2 (2017 rent data)
Table 5.4 & 5.4a (decomposition of % change rent PPP +glob)
Table 5.5 & 5.6 (effect of rent on total CC + PPP)
Graph (rank) HICP

20. Eurostat

21. Intra-EU staff CC values
CC July 2017
Duty station
50 – 70 2
BG, RO
70 – 75 3
CZ, EL, SK
75 – 80 6
HR, CY, LV, LT, HU, PL
80 – 90 5
EE, ES, MT, PT, SI
90 – 100
DEBer, DEBon, DEKar, ITRom, ITVar
100 – 110 4
DEMun, NL, AT, UKCul
110 – 125
IE, FR, FI
125 – 145
DK, SE, UKLon
Total 31
excluding BXL=LUX=100

22. Intra-EU staff PPP changes (AVG +1.7%)
Duty station
X < 0 2
ITRom, UKCul
0 ≤ X < 1.7 18
DK, DEBer, DEBon, DEKar, IE, EL, ES, FR, HR, ITVar, CY, MT, NL, AT, RO, SI, FI, UKLon
1.7 ≤ X < 3.4 5
DEMun, LV, PL, PT, SK
3.4 ≤ X 6
BG, CZ, EE, LT, HU, SE
Total 31
excluding BXL=LUX

23. Elements of 2016-17 PPP change for Intra-EU staff
No change to basic calculation methodology
Some standard elements:
- Relative movement of consumer price indices
- Replace 2x validated ECP consumer price surveys
- Replace 1x validated rent survey (6 year average)
Some one-off elements:
- New SHS taper weights in 6 year model
Not this year:
- Education PPP, Healthcare PPP, SHS dwelling weights, FBS expenditure weights

24. Some BH no longer covered by ECP…
Bxl Wgt 25
Refuse and sewerage collection; other dwelling services
0.50 31
Repair of furniture, furnishings and floor coverings
0.04 50
Combined passenger transport
0.15 59
Major durables for indoor and outdoor recreation
0.43 60
Maintenance and repair of other major durables
0.02 70
Package holidays
1.89 79
Insurance
2.25 80
Other services including financial services
0.51 =8
 total
5.79

25. Pensioners Main report Appendix 1c In red = new this year
Table 7 (2017 CC = 2017 PPP ÷ 2017 XR)
Table 6 (2017 PPP PPP + % change PPP)
Appendix 1c
Table 6.3 (decomposition of % change PPP)
Table 6.1 ( group PPP + WGT)
Table 6.2 (2017 rent ratio)
Table 7.1 & 7.2 (effect of rent on total CC + PPP)
Table 7.3 (compare Pensioner CC with Staff CC)

26. Pensioner CC values CC value July 2017 Duty station 45 – 65 4
BG, HU, PL, RO
65 – 75 5
CZ, HR, LV, LT, SK
75 – 85
EE, EL, CY, PT, SI
85 – 100 3
ES, IT, MT
100 – 110
DE, FR, NL, AT
110 – 125
IE, FI, SE, UK
125 – 145 1 DK
Total 26
excluding BXL=LUX=100

27. Pensioner PPP changes (AVG +2.5%)
Duty station
X < 0
0 ≤ X < 2.5 15
DK, IE, EL, FR, HR, IT, CY, MT, NL, AT, PL, RO, SI, SK, FI
2.5 ≤ X < 5.0 10
BG, CZ, DE, EE, ES, LV, HU, PT, SE, UK
5.0 ≤ X 1 LT
Total 26
excluding BXL=LUX
In bold = July 2016 or 2017 CC value > 100 ie. applied

28. Elements of 2016-17 PPP change for Pensioners
No change to basic calculation methodology
Some standard elements:
- Movement in Staff PPP
ie. relative movement of consumer price indices;
replace 2x validated ECP consumer price surveys;
replace 1x validated rent survey (6 year average);
2017: new SHS taper weights
- Update capital/country rent ratios
Aggregated using specific FBS expenditure weights (results of 2013 survey already integrated for the 2016 exercise)

29. Extra-EU staff Main report Appendix 1c
Table 9 (2016 CC = 2016 PPP ÷ 2016 XR)
Table 8 (2016 PPP PPP + % change)
Appendix 1c
Table 9.1 (% change CC>100)

30. Extra-EU staff CC values
CC value July 2017
Duty station
n/a 12
X < 75 47
75 ≤ X < 100 59
100 ≤ X < 125 19
125 ≤ X 7
Total
144
excluding BXL=LUX=100
>100 = 26 = 18%

31. Extra-EU staff PPP changes (AVG +4.7%)
Duty station
ALL
CC > 100
X < 0 38
Min -15.0% 8
0 ≤ X < 4.7 61 11
4.7 ≤ X < 9.4 21 3
9.4 ≤ X 24
Max +38.1% 4
Max +36.8%
Total
144 26

32. Extra-EU methodology vs Intra-EU
CC calculated on a monthly basis, and presented in two Intermediate Reports plus the Annual Report. New CC apply once PPP variation from existing value exceeds 5%.
Application of CC is at discretion of staff, thus CC is generally only requested if value >100.
A gradual switch to Intra-EU 80BH classification has begun.
New price survey data and new FBS weights will integrate healthcare and education. (see agenda point 9.3)
A research proposal to take out-of-area expenditure into account was presented at 2017 WG: application is not yet authorised. (see agenda point 10.4)

33. 22 new UN survey data introduced…
For Intermediate Report Feb-June 2017:
Bolivia, Brazil, Central African Republic, Democratic Republic Congo, Ecuador, Guatemala, Guyana, Honduras, India, Israel, Kenya, Madagascar, Mozambique, Nicaragua, Peru, Russia, Samoa, Sierra Leone, Tanzania, Trinidad & Tobago, Zambia
…plus 12 other new PPP data
7x ISRP countries
AUS, CAN, JAP, KOR, MEX, NZL, USAWDC
4x ECP countries
IS, NO, CHBer, CHGen, TR (not AL, BH, MK, ME, RS this time)

34. 2016-2017 CPI sources UN (NSI) 86 85 NSI direct 37 40 ESTAT HICP 5 IMF
n/a 12 9
144
Change CPI source for New York
From US national to NY regional

35. Other remarks
At July 2017, no value published for 12 duty stations due to political/economic uncertainties
Afghanistan, Bosnia-Hercegovina (BanjaLuka), Indonesia (BandaAceh), Iran, Iraq, Libya, Somalia, South Sudan, Syria, Venezuela, West Bank/Gaza Strip, Yemen

36. Annual Adjustment 2017 Main report Appendix 1c
AA = GSI x JBLI (Brussels/Luxembourg)
Appendix 1c
AA = GSI x JBLI x PPP change
Table 4bis (Intra-EU staff)
Table 6bis (Pensioners)
Table 8bis (Extra-EU staff)
= new tables for report

37. Analytical category report structure and content
Published on dedicated section
Fourth such report under Staff Regulations as amended October 2013
Similar transparency content to last year's report
35 categories (global; 12xCOICOP; rent; global excl.rent; +20)
Section
Coverage
Pages
Tables
Intro - 1
Annex 1 (STF) 33 4
Annex 2 (PEN) 28
Annex 3 (JBLI) 10 3

38. Links to later presentations in agenda
Agenda point 6 - dissemination
Agenda point 8 - Intra-EU
lessons from 2017 exercise; assessment of system ; FBS; EARS
Agenda point 10 - Price statistics briefing
Agenda point 9 - Extra-EU
lessons from 2017 exercise; assessment of system ; preparation of 2018
Agenda point 7 - International collaboration
Agenda point 12 - documents for public

39. Thank you for your attention!

40. Hypothetical CC Luxembourg
Staff 2016: : 111.9
ECP price surveys ECP price surveys
Education PPP (schools) Education PPP (schools)
Health PPP (hospitals) Health PPP (hospitals)
EARS rent surveys EARS rent surveys
SHS 2016 weight SHS 2016 weight
FBS 2010 pool weight FBS 2010 pool weight
Pensioners 2016: : 114.4
Staff PPP Staff PPP
calculated rent ratio 0.96 calculated rent ratio 1.00
FBS 2013 weight FBS 2013 weight
Main reason for difference = rent PPP. Main reason for increase = Rent PPP increase.

41. ECP concerns received from duty stations in Eastern Europe…
See agenda point 10.1(c)
ECP concerns received from duty stations in Eastern Europe…
Food quality: is brand content identical in all MS?
Primarily a legal issue!
Commission study announced 2017 …will monitor closely
Even if confirmed, CC impact is small
Food expenditure represents c.15% total weight
Very few brand-only food items
Mitigation is possible, if required
Replace brand-only item definitions with generic definitions which include quality parameters

42. Out-of-area consumption study
See agenda point 10.4
Out-of-area consumption study
First document presented at WG 2017
Commitment to present extended method document for technical approval
instead of Brussels, consider regional "consumer hub" (in future, identify via FBS)
In future, consider 80BH in-area, 80BH out-area?
Budget impact assessment by DGHR being done
Legal assessment by DGHR being done

43. See agenda points 7 and 9.3
New York, New York
Unusually, two Extra-EU duty stations in USA (Washington + New York)
Switzerland (Bern + Geneva); China (Beijing + Hong Kong SAR);
Some special cases: France (Nouvelle Calédonie); Bosnia (Sarajevo + Banja Luka); Indonesia (Jakarta + Banda Aceh)
Survey data for USA-Washington = ECP (OECD), but for USA-New York = UNICSC
Last NYC survey 2010 (proprietary methodology)
New NYC survey 2016 (harmonised methodology … but outlet choice)
Goal: next survey with BLS in similar way as Washington