Sunday 26 April 2015

EU budget: who pays what and how it is spent

We take a closer look at what Britain pays towards the EU budget, how Brussels spends it, and the countries that contribute the most.

We take a closer look at Britain's contribution to the EU budget, how Brussels spends it, and who pays the most.
At €4.7bn, Britain was the third-biggest net contributor to the EU budget in 2011. Photo: EPA

The EU budget added up to €130bn (£105bn) in 2011.

Germany, Europe's largest and most powerful economy, is the biggest net contributor. It put €7.5bn more into the EU pot last year than it took out, while France's €4.89bn net payment made it the second biggest contributor.

The budget cost €7.4bn last year in administration costs alone, although the European Commission highlights in its Myths and Facts FAQ that this amounts to less than 6pc of the total budget.

Britain's contribution to the EU

At €4.7bn, Britain was the third-biggest net contributor to the budget in 2011.

With an estimated UK population of 63.1m people, this means that every man, woman and child paid €178.65 (£144.17) towards the EU budget in 2011.

They got back €104.12, meaning their net contribution was €74.53.

When you take into account additional revenues raised from customs duties, agricultural levies, VAT and even sugar contributions, Britain handed over a total of €13.825bn to Brussels last year. The UK keeps 25pc of these "additional revenues" in fees - last year it received €850m.

Britain also received a €3.6bn rebate last year, paid for by other EU countries, which share the cost proportionally. This was negotiated by Margaret Thatcher in 1984.

However, due to corrections and "rebates on the rebate" enjoyed by Germany, Austria, the Netherlands and Sweden - which pay only 25pc of their normal share - France and Italy have been left to pick up the biggest share of the tab.

Last year, France contributed almost €1bn to Britain's rebate, while Italy contrbuted €718m.

Most of the money Britain receives from the EU is used to subsidise farming (€3.96bn).

Biggest EU budget beneficiaries


The bulk of the money was directed towards "cohesion for growth and employment", which helps poorer regions and countries catch up and connect to the Single Market.

Greece was the second-largest recipient. The EC increased the amount of structural funds it received by more than €700m in 2011 because of the financial crisis.

At €2,977.88, Luxembourg currently receives the most money from the EU per capita, although this figure is distorted by the fact that it is home to several EU institutions, including Eurostat, the EU's statistics office, and European Court of Justice.

At the other end of the scale, Denmark contributes the most per capita, at €264.47.

By comparison, Germany contributes an average of €240.68 per person.

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