Future MEPs' pay set for sharp rise

Future Maltese MEPs are set to earn dramatically more than the present ones after a deal on MEPs' pay packet was struck between the 25 member states and the European Parliament.

The institutions agreed that all MEPs should start earning the same salary, capped at €7,000 (Lm3,043) gross per month.

Reimbursement for travel expenses will also become more transparent.

The new system will only enter into force following the next European Parliament elections in 2009. Thus, the salary of the current Maltese MEPs will remain at €1,295 (Lm563) a month.

Council sources told The Times that all member states agreed with the new system and the European Parliament will now have to rubber stamp it. The Parliament is expected to approve the new package by the end of the month.

The sources said that apart from future MEPs, Malta itself will also gain financially from the agreement. Under the present system, salaries of Maltese MEPs are paid for by Maltese taxpayers. But future MEPs' salaries will be financed from the EU budget.

Furthermore, MEPs will be subject to a 25 per cent European tax but member states can choose to ask their MEPs to pay into their coffers the difference in tax they would have paid had they been receiving their salary in their home country. So with their pay level subject to 35 per cent tax in Malta, Maltese MEPs may have to start paying an additional 10 per cent.

Currently, MEPs are only entitled to the same salary as that of their counterparts in their respective national parliaments. This means that MEPs doing the same job in Brussels and Strasbourg are earning very different pays. For example, Italian MEPs are paid €11,000 (Lm4,782) a month while those from Spain earn just €2,600 (Lm1,130).

The pay gaps have increased with enlargement, with MEPs from Lithuania being the worst off earning just €800 (Lm347) a month.

The agreement also allows member states to retain the present payment system if they choose to do so. It provides for a transitional period during which each member state may continue to apply, for the members elected by its citizens, rules different from the provision of the new statute. This will allow MEPs to be placed at least on an equal footing with members of their respective national parliaments. This provisional transitional period can be used till 2019.

Government sources told The Times that it has not yet taken a decision on whether it will use the transitional period or charge the additional tax. It will decide closer to the next EP elections.

The new statute will also mean a different travel expenses regime. Upon the introduction of the new statute in 2009, travel expenses would no longer be refunded on a flat-rate basis as at present. Instead, MEPs would have their expenses reimbursed on the basis of actual costs incurred, thus improving transparency.

Members would also enter a common pension scheme, with contributions paid by the EU over and above their salary.

This agreement has been in the pipeline for years; various attempts to find a compromise always failed at the last minute. The last effort was blocked in December 2003 by Germany, France, Austria and Sweden, who argued that the proposed monthly salary was too high.