EUROPEAN COMMISSION: COUNCIL MAKES CONCESSIONS ON PAY BUT STANDS FIRM ON PENSIONS.

The Council noted "considerable progress" on a number of technical points (see European Report 2759 for further details). Likewise the Council "could accept, subject to an overall satisfactory final package including the issue of the temporary contribution, the principle of a multi-annual updating mechanism for pay and pensions including a "method" for a finite period to be reviewed after a certain number of years, in particular in the light of its budgetary effects", in other words the proposal from Neil Kinnock for an extension of the "method" for a period of ten years, along with a five year review clause.

Another positive signal from the Council to Mr Kinnock: "Without prejudice to the negotiations on the individual elements of the remuneration package, the broad pay and allowances proposals made by the Commission form a good basis for further work provided that they do not increase overall net income in real terms", according to the Council's conclusions, though the issue of allowances remains highly controversial within delegations on the Council's working group of "Staff Regulations".

By contrast, the Council not surprisingly considers that "the final package must include an adaptation of the pensions system more consistent with the trends prevailing in the Member states while respecting acquired rights as well as taking into account legitimate expectations of present staff through appropriate transitional arrangements". An explicit invitation to envisage a dual system for officials recruited in future, notably those from the candidate countries...