3.3.3. The current context of change

Different internal and external circumstances will coincide over the coming years. They all will result in a situation where changes go deeper and are more radical than the European Commission has experienced before.²⁵

The Commission is currently negotiating the new multi-annual financial framework for the period 2014-2020. However, in the current context of economic recession in the European Union, the acute financial crisis in Greece which risks spreading to other Member States such as Spain and Italy, negotiations are unusually tough. It is a fact that Member States at national level have been subject to deep budget cuts, austerity packages and forced savings in their own national services. Against this background, there is very strong pressure on the Commission to cut personnel and outsource activities while at the same time adding new tasks and responsibilities to the institution.

Moreover, the timing coincides with the expiry of the method how Commission salaries and pension are adjusted, which opens another window for reductions. The new proposals for reform will negatively affect the statute of public service, slow down career development, reduce pension rights, and increase number of working hours and working years. Fewer staff will need to fulfil more tasks and assume more responsibility in the future, with less favourable working conditions.

Already now against the background of the current financial crisis it has been decided that the administrative budget of the Commission is frozen below inflation, with the result that staff has to be reduced. Starting from 2013, the Commission has to apply the so called “Staff Levy” with the target to reduce staff across all categories by 10% over the next five years. Half of these savings correspond to a net reduction of staff, the other half is meant for redeployment, i.e. Commission staff not needed any longer for certain policy areas is re-affected to new policy priorities. While a percentage of 10% may not sound much, it will affect more than 3000 staff and each single Directorate General.

It has to be kept in mind that the internal administrative costs of the Commission are relatively low. The administrative budget corresponds to only about 5% of the overall budget the Commission is managing. Savings achieved through the above reforms will thus be of limited financial importance and represent more a symbolic value for the Member States.

Beyond cuts in the administrative budget it is also likely that the overall budget managed by the European Commission will be reduced in the new financial perspectives, thus forcing Member States and the Commission alike to set clear priorities. In practical terms this could mean that priorities fixed in the Europe 2020 Vision will no longer be valid, and that other themes may emerge instead. This may have in turn an effect on the way the Commission is structured, leading to the creation of new Directorate Generals/Directorates or to their disappearance.

To this should be added that the term of the current Commission ends and a new Commission will arrive in 2014, a milestone which is typically accompanied by new proposal coming from Commissioners, changes in the Cabinet, new appointments at the Top management of the Commission - and reorganisations.

In summary, several changes coincide (financial crisis which for the first time may lead Member States to insist on zero growth or a reduction of the Commission budget, the start of a new 7 year planning cycle, start of a new Commission term of five years) which changes the magnitude and the dimension.

This period of unprecedented change most likely will have several consequences:

• Since the Commission reacts to change mainly by reorganisations, the number and frequency of reorganisations will increase;
• The changes described above put strong pressure on Commission staff, with a potential negative connotation (staff cuts, deterioration in working conditions, more stress etc). The fact that so many staff members will be affected at once, adds another dimension. Staff reaction to change can be contagious, to the positive and to the negative. Even now, at the writing of this thesis in 2012 and long before the bulk of the reform will hit, there are “first writings on the wall”. Trade unions mobilize, not only around the issue of staff reform which constitutes their legitimate role and core task, but – and this is surprising – against reorganisations, or more precisely, the way reorganizations have been done in the Commission in the past and are currently being done.
• In a situation where human resources decrease while increased organisational performance is demanded, staff involvement becomes a priority. Working more and longer hours at less attractive conditions will require high motivation from staff. In this context, participatory management is no longer an "altruistic" form of management but may turn into a necessity to get more out of less staff.

²⁵ Union Syndicale: What is the Working Party on the Staff Regulations Cooking Up for Us, Information Leaflet, Brussels June 2012