The EUROPEAN UNION’S BUDGET

The EU Budget Problems of the financial perspective 2007-2013 Is not the sum of the EU Member States Budgets Since 1988, it is a multiannual planning instrument Financial perspectives Problems of the financial perspective 2007-2013 Enlargement Financial crisis Geo-political changes (oil price, turbulences in Middle East, Asian emerging economies, etc)

The EU Budget is funded mainly by its own resources (99%) and other sources of revenue the own resources are not allowed to exceed 1,23% of the EU’s GNI total revenue must equal total expenditure.

Resources Traditional own resources Other sources: Mainly customs duties on imports from outside the EU Variable levis on agricultural products own resource from value added tax (VAT) own resource based on gross national income (GNI) Other sources: taxes on EU staff salaries contributions from non-EU countries to certain programmes fines on companies for breaching competition laws, etc.

Expenses The multiannual financial framework lays down maximum amounts  for each broad category of expenditure ('headings' for a clearly determined period of time (several years). 2007-13 financial framework had as  objectives: headings 1 and 2: harnessing European economic integration (the "single market") to the broader goal of sustainable growth, by mobilising economic, social, and environmental policies. heading 3: strengthening the concept of European citizenship by creating an area of freedom, justice, security and access to basic public goods and services. heading 4: establishing a coherent role for Europe on the global stage – inspired by its core values – in the way it assumes its regional responsibilities, promotes sustainable development and contributes to civilian and strategic security

For 2014-2020 http://ec.europa.eu/budget/figures/interactive/index_en.cfm http://ec.europa.eu/budget/mff/figures/index_en.cfm

EU BUDGET AS % OF THE TOTAL EU’s GDP

Funding of the EU Budget EU’s budget must balance every year Financing sources: four main types Tariff revenue ‘Agricultural levies’ (tariffs on agricultural goods) ‘VAT resource’. Like a 1% value added tax (reality is complex). GNI based. tax paid by members based on their GNI. Miscellaneous relatively unimportant since 1977 taxes paid by eurocrats, fines and earlier surpluses Pre-1970s direct member contributions

Evolution of Funding sources

Contribution vs GDP, 1999, 2000 % of GDP per member is approximately 1% regardless of per-capita income EU contributions are not ‘progressive’ e.g. richest nation, (L) pays less of its GDP than the poorest nation (P)

Net Contribution by Member

EU Budget expenditures

The budget: Expenditure

Evolution of spending priorities

Evolution of spending, level

Evolution of spending level