The imagination of the super-bureaucrats who rule Brussels and Frankfurt knows no bounds. And so from the attic of wage policies emerges an authentic piece of archeology such as the single point of contingency that Italy, having invented it, abolished with the referendum forty years ago. Revealing the resurrection of the escalator is the Financial Times recounting that ECB employees got a 4.07% pay rise. But now they want more. Carlos Bowles, vice president of the Ipso union representing central bank staff wants “a more balanced approach” like “the one in place at the European Commission”.
In fact, the paycheck of EU employees rose by 6.9%. Some of it is the result of an automatic adjustment mechanism designed to maintain purchasing power. Exactly how the old escalator was. Brussels – specifies the London newspaper – he underlined that the annual adjustment was “calculated by Eurostat on the basis of the evolution of the purchasing power of national civil servants”, considering that if inflation exceeds a certain level in Belgium and Luxembourg, the Commission could grant staff an increase mid-year backdating it to January.
The idea found sensitive ears in Frankfurt “because – according to the union – the ECB would not have followed the wage adjustment system correctly”. For this the personnel committee, elected by all employees and in which Ipso has six out of nine seats, it has launched an appeal signed by 373 employees for the introduction of new wage automatisms. The ECB promptly replied: “Every three years an interested party can request a review of the general salary adjustment”.
The revision – the second in the history of the Eurotower – should end in 2024 when Christine Lagarde hypothesizes that the cost of living will drop from the current 7 percent to just over 3%. In any case, in addition to the technical aspect, there is the implication that the politician – according to the Financial Times – could put embarrassed the leaders of the ECB. On Thursday, Lagarde repeated her earlier warning against a “blow-for-blow” dynamic in which workers and employers seek to limit the impact of inflation by pushing up wages and prices.
The ECB chief said this would increase the “risk of something that is much more difficult” by keeping price pressures elevated and requiring “more active measures in monetary policy”. If he were to concede substantial raises to its employees, how could curb European workers’ demands for higher wages in response to inflation?