EU Commissioners' golden parachutes

The Sunday Times reported on the huge payoffs the 13 EU Commissioners stepping down this week will walk away with, on top of the pretty hefty salaries they netted while in office.

Open Europe has calculated that the 13 outgoing EU Commissioners have cost taxpayer €2.7 million each.

Each one will walk away with an average of €1.3 million in ‘golden goodbyes’ alone. The total bill in ‘golden goodbyes’, including pensions, for those leaving is more than €16.6 million.

Through earnings and pay-offs, the 13 Commissioners will walk away with a total of more than €35.6 million, or €2.7 million each. Their pensions alone are expected to be worth a combined total of more than €11.6 million over their lifetimes (Assuming an average life expectancy of 16.7 years from the age of 65.)

Each Commissioner stepping down is entitled to a ‘resettlement allowance’ of a month’s salary (€19,910 or €22,122 for Vice Presidents), irrespective of how long they have served; a ‘transition allowance’ paid for 3 years worth between 40 and 65 percent of their final salary (this is a minimum of €286,703 but can rise to as much as €438,017 for a long-serving Vice-President); as well as a generous pension worth at least €51,069 a year from the age of 65, for those serving for five years. (For a breakdown see http://ec.europa.eu/commission_barroso/entitlements/entitlements.pdf )

This is in addition to the €238,919 a Commissioner earns per year, or €1,194,595 over the full five-year term. Vice-Presidents earn €265,465 or €1,327,325 over five years. This does not include other perks such as housing allowances and entertainment allowances, worth between €43,122 and €50,757 every year.

One of the biggest winners is Polish Commissioner Pawel Samecki, who has only been in the job six months, but will walk away with a ‘golden goodbye’ of €391,898. This is in addition to the €141,020 he has made in earnings alone. Samecki replaced Danuta Hubner in July this year but has not been re-nominated for the next Commission team.

The last Commission mandate, which ran from 2004 to 2009, saw a total of 34 Commissioners in the 27 posts, who collectively earned more than €40.7 million in salaries, housing allowances and entertainment allowances alone – that’s more than €1.5 million for each of the 27 Commission jobs.

The highest earners were Margot Wallstrom and Gunter Verhuegen who each pocketed €2,991,313 for their ten years in Brussels. They will each receive annual pensions of €113,486 for the rest of their lives. The newly-appointed EU Foreign Minister Catherine Ashton, who took over as EU Trade Commissioner from Lord Mandelson last year, took home €282,040 in earnings for just over a year in office.

In addition to the 13 Commissioners leaving next week, 7 Commissioners have left their posts during the 2004-2009 term. As of next week, taxpayers will have contributed more than €24.3 million in ‘golden goodbyes’ for the 20 outgoing Commissioners – including €988,894 for Lord Mandelson.

All this comes on top of news last week that all EU Commissioners and the 38,000 people working in the European Commission bureaucracy are set to receive an inflation-busting 3.7% payrise - in spite of public sector pay freezes in many places around Europe.

Some other interesting background to this:

In an interview with Swedish Radio on 21 November, Swedish Europe Minister and incoming Commissioner, Cecilia Malmstrom, conceded that the salaries and perks given to European Commissioners are “unreasonably” high. The Swedish press reported that, as a Commissioner, Malmstrom will receive a basic monthly salary of over €20,000, a transition payment of €41,000 as she takes office, and an additional €3,100 a month for living abroad. In addition, every month Malmstrom will receive €574 in family allowances, €681 in child allowances and €486 in school allowances for her two children, according to Swedish Radio. She will also qualify for the pensions and pay-offs described above when she leaves office. Malstrom said: “It is an unreasonable amount of money, but I’m not the one deciding the conditions.”

Open Europe unveiled the extent of Commissioners’ remuneration in March 2009, prompting several telling responses.

Asked by the Belgian press about Open Europe’s figures, EU Development Commissioner Louis Michel exclaimed: "if that's true, I'll retire immediately." Belgian daily De Standaard went on to report that, "after consulting an assistant, the message however appeared to be accurate. This was followed by Louis Michel suddenly changing his mind, saying the compensation is completely justified: 'We are being well paid. But every morning getting up at 5 o'clock, lots of travelling, heavy files...This is a parachute but not a golden one.'"[5]

Danish Commissioner Mariann Fischer-Boel responded to the figures saying "I'm worth all the millions."

Commission spokesperson Valerie Rampi said: "Open Europe didn't discover anything new, it's all public and online... Everyone who has worked as a commissioner is entitled to pension rights, like you and me". She then denied that Commissioners received "golden one-off payments".[6]

Despite this implicit confirmation that the figures were correct, EU Communications Commissioner Margot Wallstrom later said in an interview that the figures were “deliberately twisted and exaggerated data.” She went on: "Stepping in office within the European Commission (EC) does not include talks about salaries, allowances and retirement payments. It's the Council of the European Union that decided in the matter and therefore all changes are up to it. The current rules have been around since 1967 and are open to the public."