Category Archives: Cyprus

Presidents and Paupers I: How much do Western European presidents earn?

Presidential salaries – particularly during and after the European financial crisis – have been a hotly debated topic in a number of European republics and several office holders have voluntarily taken a pay cut. Last year, I wrote two blog posts about the earnings of Western and Central and Eastern European presidents or my old blog (presidentialactivism.com) which proved to be highly popular and generated some media attention. The posts which are reproduced here today and tomorrow try to answer the questions How much do presidents actually earn? Did the crisis have an impact on presidential salaries? And how do their earnings relate to other factors?

Austrian president Heinz Fischer is the highest paid president in Western Europe (if you do not count the Chairman of the Swiss Confederate Presidency) | photo by GuentherZ via wikimedia commons

Presidents’ absolute salaries in comparison

Given different regulations about salaries, lump sums and other benefits it is difficult to establish universally how much presidents actually earn. For this post I tried to ascertain (accurately, I hope) presidents’ yearly gross annual income exclusive of benefits. However, I decided to include so-called 13th/14th salaries as these are part of the taxable income and many presidents were either entitled to receive those or were recently deprived of them (see more under the penultimate subheading). Although the national gross average income would certainly be easier to interpret as a point of reference, I had chosen the 2012 GDP per capita for the sake of reliability. I was also not able to find reliable data for Cyprus (please leave a link in the comment section if you know a reliable source).

Western european presidents_absolute annual salary_presidentialactivism.com_

The bar chart shows that there is a huge variety in presidents’ salaries in Western Europe. The top-earner is the Swiss Federal President, i.e. the chairperson of the seven-person collegiate presidency that is elected ‘President of the Confederation’. Members of the Federal Council receive €360,358 annually, the president receives an additional €9,735 (i.e. 370,093 annually). The runner-up and top earner among the ‘normal’ presidents – the Swiss-type collegiate presidency is worldwide unique – is the Austrian president. Current incumbent Heinz Fischer receives a gross annual salary of €328,188 which consists of 12 regular monthly salaries + two additional monthly salaries (not benefits) of €23,442 each. George Abela, the president of Malta,, on the other hand earns the least with just €56,310 and thus almost six times less than the Austrian counterpart. The average presidential gross annual salary is €191,149, the average GDP per capita (2012) is €30,860. There are only few presidents who earn a similar absolute gross yearly salary, although this looks different for relative yearly salaries.

Setting earnings into perspective

Absolute numbers are always present a somewhat distorted image in cross-country comparisons, which is why it is good to set presidents’ gross annual income into perspective. As mentioned above, I use the respective country’s GDP per capita from 2012 as a point for comparison.

Western european presidents_relative annual salary

There is a lot of change of positions when comparing absolute and relative gross annual income. While the Maltese presidents is still the lowest paid democratically elected head of state in Europe with 350% of the GDP per capita, previous front-runner Switzerland is with 606% of the GDP/capita only 12 percentage points above the Western European average. Greek president Karolos Papoulisas – in absolute earnings rather on the lower end of the spectrum – now finds himself in third position as his annual gross salary is more than eight times more than the GDP per capita (and this even though his salary had already been halved last year – more on this below). The top-earners in relative terms are by far the presidents of Italy and  Austria. Their gross annual salary amounts to almost nine times more than the nominal GDP per capita.

Western european presidents_scatterplot

The correlation between GDP per capita and presidential salaries is surprisingly high (R=0.8) and Switzerland is the only real outlier. The plot also shows that Finnish president Niinistö earned less than one could have expected from the GDP per capita – even before his salary cut.

The crisis and its consequences

The crisis has certainly taken its toll on presidential salaries in Western Europe as several presidents experienced a pay cut or voluntarily cut their own salary. French president Hollande cut his salary by 30%, Irish president Higgins voluntarily waived 23.5% of his salary, Finnish president Niinistö waived 20%. In Greece, parliament cut the president’s salary by 50% (and abolished a €6,240/month  representational allowance) after president Papoulias had suggested it. Papoulias had previously already waived his salary for a whole year as well as his right to a 13th and 14th monthly salary. Cypriot president (who could not be included in this ranking because of missing data) also waived his additional monthly salaries and cut his salary by 25% after his predecessor had already seen a 20% salary cut.

On the other hand, German president Gauck and Austrian president Fischer recently saw an increase in their income. In 2012, Gauck’s gross yearly income went up from €199,000 to €217,000 while Fischer receives has a modest €411 more in his bank account every month since the beginning of this year (this increase also applies to his two additional monthly salaries so that overall the gross yearly income went up by €5,754). At least in the case of Germany, this increase should not be seen too controversial. The president’s earnings are still rather average (see also scatter plot above) and had not been increased for almost a decade (furthermore, the salary is indirectly tied to the income of federal clerks).

Powers and mode of election

With relation to presidential powers and the mode of presidential election, the results contrast those from Eastern Europe. Nevertheless, the absolute results depend on whether Switzerland is included or not. Directly elected presidents have a gross yearly income of €183,355 (573% of the GDP per capita), while indirectly elected presidents (Switzerland included) earn €202,061 (664%) and thus more in absolute and relative terms. However, if one excludes Switzerland (which might be sensible due to the exceptionalism of the Swiss collegiate presidency) the gross yearly income is only €160,511 (703% of GDP per capita) which in absolute numbers is less but significantly more in relative terms.

When it comes to the relationship between presidential powers (measures taken from Siaroff 2003) and presidential income the correlation is R=0.0002 and thus non-existent.

***Sources (click on the country names)***
*AustriaFinlandFranceGermanyGreeceIcelandIrelandItalyMaltaPortugalSwitzerland*

_________________________________________________
This post first appeared on presidentialactivism.com on 1 August 2013.

Presidential term lengths and possibilities for re-election in European republics

I recently read up on the amendments made to the Czech constitution to allow for popular presidential elections and stumbled across Art. 57 (2) – ‘No person may be elected President more than twice in succession’ (which already applied to indirectly elected presidents) and wondered how it looks in other European republics and how it relates to term length. The results of my study of each country’s constitution are summarised in the bar chart below.

While Maltese president Marie-Louise Coleiro Preca (left) can only serve a single term of five years, Italy’s Giorgio Napolitano (right) has recently been elected for his second 7-year term and there is no term-limit |photos via wikimedia commons

While Maltese president Marie-Louise Coleiro Preca (left) can only serve a single term of five years, Italy’s Giorgio Napolitano (right) has recently been elected for his second 7-year term and there is no term-limit | photos via wikimedia commons

Term length

Term length is relatively uniform across European republics – in all but six countries a president’s term is five years. Exceptions can only be found in Iceland and Latvia (4 years), Austria and Finland (6 years), and Italy and Ireland (7 years). Interestingly, all presidents serving terms of six or seven years are popularly elected; yet, so is the president of Iceland who is only serving a four-year term.

Presidential term lengths and re-election provisions in the EU member states_presidentialactivism.com

Term limits

A limitation to two consecutive terms can be found in twelve out of 22 European republics, i.e. a former president who has already served two consecutive terms could theoretically be re-elected for a further two consecutive terms after ‘taking a break’. In Latvia, the constitution states that an individual may not serve as president longer than eight consecutive years (which equates to two terms in office). In Portugal, the constitution specifies that a president who has already served two consecutive terms can only be re-elected as president after a break of at least five years. In other countries with a limit of two consecutive terms no such provision exists.

In seven out of the ten remaining republics, presidents can only be elected for two terms – irrespective of consecutiveness. In Malta, a president can even only be elected for one term (although the constitution is rather imprecise on the subject). In Iceland and Italy, there are no regulations on re-election. While it is the norm in Iceland that presidents serve several terms – since 1944 all presidents have served at least three consecutive terms (the current president Ólafur Ragnar Grímsson is in his fourth term at the moment), Italian president Giorgio Napolitano is the first Italian president to be re-elected.

___________________________________
This post first appeared on presidentialactivism.com on 22 August 2013.