July 8, 2009
I think myself that we have more machinery of government than is necessary, too many parasites living on the labor of the industrious.
The people are the government, administering it by their agents; they are the government, the sovereign power.
There is hardly any person living in Europe who does not come across names such as European Commission, European Parliament, Council of the European Union, European Central Bank, European Ombudsman, Court of Justice of the European Communities, European Police Office (Europol), European Environment Agency, or European Space Agency at least once a day… Names that govern the lives of the vast majority of European citizens and have a considerable impact on the lives of people around the globe… These are just a few of the numerous European institutions, specialized agencies and bodies (further in the text referred to as “European Institutions”) spread across Europe, which are entrusted with developing the Community’s common legislation at the supranational level “in order to gain a strength and world influence none of [the Member States] could have on their own” and with “uphold[ing] the rule of European law” (Gateway to the European Union). In addition to those come the practically countless European Commission Delegations and Offices all over the world…
All of the above-mentioned institutions, agencies, bodies, delegations, offices and others, numbering as many as the sand grains on a beach, are literally paid by the taxpayer: every citizen of a European Community Member State pays his or her contribution to the common pot forming the budget of the Community. This contribution, initially “a balancing item”, “has become the largest source of revenue” (European Commission’s EU Budget at a glance) and accounts for 65,4 % of the total revenue for the 2009 budget (EUR-Lex Budget online) (see also Figure 1 below):
Figure 1. Preliminary assessment of the share of the various sources of revenue
in the 2009 budget of the European Communities (actual figures in the text)
(Source: European Commission 2008c).
Figure 2 below clearly shows the trend of increasing share of this component in the revenue of the European Communities:
Figure 2. Evolution of the sources of actual revenue for the budget of the European Communities
from 1991 to 2007 (Source: adapted from Court of Auditors 2008a).
On the average, about 6% of this amount has been spent on so-called “administrative costs” for “running the European Union” or “staff and building costs” (as described in the EU Budget at a glance) of the above European Institutions in the period 2004 – 2008, and the figure exceeds 6,6% in the 2009 budget (see also Figure 3 below). However, one should not let oneself be misled by this relatively constant share to believe that the administrative costs remain constant year after year; on the contrary, in absolute figures these costs have been increasing every year during the last six years as clearly demonstrated by Figure 3 below.
Figure 3. Administrative costs for the period 2003 – 2009 in absolute numbers and as budget share
(Note: The figures for the financial years 2003 – 2008 correspond to the adopted budget plus
the amending budgets for the respective year; the figures for the financial year 2009 correspond
to the General budget of the European Communities for the financial year 2009,
which was the only available source at the time of preparation of this publication)
(Source: data from the EUR-Lex Budget online).
The main reason for these constantly growing costs is the expansion (not to say explosion) of the administration – a process wittily described by Parkinson on another occasion as “the rising pyramid” in his book Parkinson’s Law and Other Studies in Administration (1957), who formulated the following principles related to staff increase in public administrative departments not at war:
Work expands so as to fill the time available for its completion.
Granted that work (and especially paperwork) is thus elastic in its demands on time, it is manifest that there need be little or no relationship between the work to be done and the size of the staff to which it may be assigned.
The fact is that the number of the officials and the quantity of the work are not related to each other at all. The rise in the total of those employed is governed by Parkinson’s Law and would be much the same whether the volume of the work were to increase, diminish, or even disappear.
… we may distinguish at the outset two motive forces. They can be represented for the present purpose by two almost axiomatic statements, thus: (1) “An official wants to multiply subordinates, not rivals” and (2) “Officials make work for each other.”
That Parkinson’s postulate of “little or no relationship between the work to be done and the size of the staff to which it may be assigned” made over half a century ago is absolutely true for the European Institutions today is proven by the institution of the European Ombudsman: as the European Parliament notes in its resolution of 23 April 2009 with observations forming an integral part of its Decision on discharge in respect of the implementation of the European Union general budget for the financial year 2007, Section VIII – European Ombudsman (C6-0423/2008 – 2008/2282(DEC)):
“… over the period 2003 to 2007, commitment appropriations have steadily increased from EUR 4,4 million to EUR 8,2 million (nearly +86%) and posts from 31 to 57 units (+84%), while complaints have increased from 2 436 to 3 217 (+32%) and new enquiries opened from 253 to 308 (+22%) …”
In other words this means that while the number of open enquiries has increased only by 21,7%, and the incoming complaints have increased by 32,1%, in the reference period the institution’s staff has increased disproportionately by 83,9% (or 3,9 times higher than the increase in open enquiries and 2,6 times higher than the increase in complaints).
The staff increase of the European Institutions will be illustrated on the example of the Commission of the European Communities (alias the European Commission), which in 1999 started an ambitious task of reforming itself in order “to equip the institution with a modern and effective European civil service that [is] able to meet the major challenges facing the Union”, a reform described as “the most radical internal modernisation since the European Commission was established in 1958” (European Commission 2006). Because of the inconsistent and partial data in the General Reports on the Activities of the European Union, which were used as the source of data, only the so-called “permanent posts for administrative duties” (alias “permanent administrative posts”) were taken into consideration. Figure 4 below clearly shows the increasing trend in the number of Commission employees and the coupled with it administrative costs increase:
Figure 4. Number of permanent posts for administrative duties in the Commission in the period 1997 – 2007
and the coupled with it increase in the administration expenditures
(Source: data on staff numbers from the General Reports on the Activities of the European Union,
data on costs from the EUR-Lex Budget online as described in the note to Figure 3).
The graph showing the increase in staff number is limited to 2008 by the most recent edition of the General Report on the Activities of the European Union available at the time of preparation of this publication. The graph presenting the increase in the administrative costs is limited to 2003 by the information available in the EUR-Lex Budget online database.
The drop in the graph corresponding to 2003 can be explained with the 2002 institutional reform (Commission of the European Communities 2001, Council of the European Communities 2002), which led to the proliferation of various permanent and temporary “offices attached to the Commission”, “decentralised bodies” and “agencies” (European Commission 2004, 2005, 2006, 2007, 2008, 2009) (hereunder referred to as “Commission Extensions”) in the following years and thus resulted in an “export” of employees to these Commission Extensions (see also European Commission 2009, Court of Auditors 2008).
As already mentioned, the above figure refers only to the “permanent posts for administrative duties” in the Commission; however, a look into the data reveals the same increasing trend for the Commission Extensions. With new agencies established every year (two agencies expected creation as of the time of preparation of this paper: the European Electronic Communications Market Authority (European Commission 2008) and the Agency for the Cooperation of Energy Regulators (European Commission 2009)), there is no end to the rise of the pyramid.
In relation to the above it is worth mentioning the results of my study on the efficiency of the European Ombudsman revealing that, despite its reform, the Commission of the European Communities was the reason for most of the maladministration complaints submitted to the Ombudsman in the period 2006 – 2008. Considering the fact that the European Personnel Selection Office is merely one of the Commission Extensions as proven by Decision 2002/620/EC establishing a European Communities Personnel Selection Office, which in its Article 4 explicitly states that “Any appeal in [areas of requests and complaints relating to the exercise of the powers conferred under Article 2(1) and (2) of this Decision] shall be made against the Commission” (see also the office’s subordination to the European Commission), the following numbers appear: 86,7% of the complaints in 2006, 60% of these in 2007 and 73,3% of the ones in 2008 targeted the Commission.
Further, it should be pointed out that, as little as the share of administrative costs incurred by the staff increase may seem at the first glance (see Figure 3 and Figure 4 above), in absolute figures these costs are comparable to (and in some cases even exceed) the planned annual budget revenue of many Member States (see Table 1 below for examples), from which these costs are financed through the above-described mechanism.
Table 1. Comparison between the administrative costs of the European Communities and the budget revenue of selected Member States, in EURx109.
In addition, professionals like Heaton-Harris claim that these costs are much higher considering the numerous “decentralised bodies” of the Commission of the European Communities (e.g., Community agencies) and Community “satellite bodies” that have their own budgets (Court of Auditors 2000, Court of Auditors 2001, Court of Auditors 2007, Court of Auditors 2008).
A stable trend of increase in the number of employees in the European Institutions, respectively in the budgets of the institutions, which is not necessarily coupled with the amount of work done by these institutions, is observed since 1997. There is, therefore, considerable potential for optimization of the work of the European Institutions and, hence, of their spending of taxpayers’ money.
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