A year in review: EU institutions' hiring flops
Not everything in the European institutions’ garden was rosy in 2021, especially when it came to recruitment. The long-debated topic of whether those working at the EU institutions in Luxembourg are being fairly paid finally made an important step forward last year.
For the first time, the European Commission put options on the table during a meeting of high-level representatives from all European institutions in Luxembourg, sources told the Luxembourg Times in October. They included a housing allowance for new recruits on the lowest end of the salary grid.
Institutions have been struggling to attract staff to Luxembourg for years because workers receive the same salary in Luxembourg as they would in Brussels, where cost of living - particularly housing - is lower.
The European Court of Auditors wrote a strongly-worded letter to the EU Commissioner responsible for the human resources budget, Johannes Hahn, saying it was “absolutely necessary” to raise salaries in the Grand Duchy.
Off to a slow start
Recruitment also proved difficult for the European Public Prosecutor’s Office (EPPO) – the latest institution to join Luxembourg’s pool in Kirchberg – after it set up shop in June. The bloc’s fraud-fighting agency became embroiled in a funding row with the European Commission after the bloc’s executive arm reportedly blocked a €7 million allocation for EPPO to hire new staff.
Each EU country that participates in EPPO, needs to appoint a prosecutor working with teams in their home countries to investigate fraud and crimes against EU funds. But Slovenia slowed down EPPO’s efforts to fully carry out its tasks after it took the country until November to appoint its two prosecutors.
During the same month, EPPO secured its first conviction after a former Slovak mayor was handed a three-year suspended sentence for providing false documents to illegally obtain financial aid from EU money.
The former mayor went before court in his home country, where he pleaded guilty to committing an “attempted offence against the financial interest of the EU” by falsifying documents to illegally obtain financial support from the European Social Fund, a tranche of funding handed out by the Commission each year to help people find jobs by learning new skills, EPPO said at the time.
EIB big shots jumping ships
Recruitment also made headlines at the European Investment Bank’s building, after it was revealed that a string of the bank's highest managers had moved into jobs at private companies they provided loans for almost immediately after they left the EIB, ignoring the then-one year mandatory cooling-off period.
Following pressure from three European parliamentarians, the EU bank later updated its code of conduct, doubling the cooling-off period to two years, bringing it in line with the rules for top staff at the European Commission.
Among the executives who had ignored the cooling-off period were Emma Navarro, the EIB vice president who joined the board of Spanish multinational Iberdrola just three months after leaving the EIB, where she oversaw the approval of loans to the Spanish utility firm. Another was former Vice-President Andrew McDowell who joined consultancy firm PricewaterhouseCoopers as a partner, seven months after leaving the bank. McDowell was involved in a €15 billion lending programme during his time at the EIB, for which PwC was a consultant. Alexander Stubb, an ex-prime minister of Finland and EIB vice-president, became the director of the European University Institute last year, four months after leaving the bank. The EIB funds some of the school’s activities.
The EU bank is ramping up recruitment in Kenya, where it has set up a new office in a bid to gain more clout in Africa. In October, the Luxembourg Times reported that the EIB was to open a new branch for projects in developing countries, starting from an office in the Kenyan capital of Nairobi.
It comes in the wake of scrapped plans to designate a single EU overseas development bank. The project comes after the EU’s drive to create a new development bank came to a dead end, at least for the foreseeable future. The aim was to expand either the EIB or the London-based European Bank for Reconstruction and Development (EBRD) with a new mission. But the plan was shelved as politicians focused instead on tackling the Covid-19 pandemic.
The EIB’s plan to open a branch in Kenya was a “more inefficient set-up than if there was just one development bank for the EU”, a source familiar with the EU plans told the Luxembourg Times.
Auditors in the spotlight
The European Court of Auditors came under scrutiny in December following allegations made in a journalistic investigation about auditors' expenses and living arrangements.
Klaus-Heiner Lehne, President of the European Court of Auditors, appeared before a sitting of the EU parliament’s Budgetary Control Committee to address claims made in an article published by the French daily newspaper Libération that he and eight other auditors had received unwarranted accommodation allowances.
The budget watchdog will now provide documents for EU politicians to inspect.
The accusations came just months after the European Court of Justice (ECJ) ordered former auditor Karel Pinxten to forfeit two-thirds of his ECA pension for abuse of expenses.
Pinxten’s actions, which included using an ECA card to buy fuel for other people’s vehicles, had inflicted “serious damage” on the “image and reputation” of the guardian of the EU’s finances, the ECJ said. Pinxten is facing an ongoing criminal investigation in Luxembourg over the matter.