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Tuesday, February 12, 2013

E.U. Budget: Misconceptions

So many misconceptions have riddled through perceptions of the E.U.’s budget that the European Commission published a “myth-buster” page on its web-site. As against the claim that the E.U.’s budget is enormous, for example, the Commission points out that the 2011 budget was about €140 billion, while the combined budgets of the 27 states was €6.3 trillion. In fact, the E.U.’s budget was less than that of the budgets of medium-sized states such as Austria and Belgium. Whereas the E.U. budget represented about 1% of the E.U.’s GDP (the total value of all goods and services produced in the E.U.), the typical state’s budget is 44% of the state’s GDP. Relative to economic activity, the E.U. budget is not enormous, the Commission concludes.
In terms of the growth of the E.U. budget, the Commission points out that between 2000 and 2010, the state budgets increased by 62% while the E.U. budget increased by only 37 percent. Lest it be argued that the state budgets are more democratically determined, the European Parliament, the members of which are directly elected by E.U. citizens, must approve the E.U. budget.
In case it is presumed that most of the E.U. budget goes to administration, the Commission points out that administrative expenses amount to less than 6% of the total E.U. budget, with salaries accounting for half of that 6 percent. More than 94% of the budget, according to the Commission, “goes to citizens, regions, cities, farmers and businesses.” In this regard, the spending is not qualitatively different from state spending. In fact, state and local officials typically select the E.U.-sponsored projects best suited to the officials’ respective areas.
Lest it be thought most of the E.U. budget goes to farmers, direct aid to farmers and market-related programs was just 30% of the budget in 2011, and rural development spending was only 11 percent. For perspective, around 70% of the EC’s budget in 1985 was spent on agriculture. Put another way, the E.U. has diversified, hence reaching more citizens.


Myths and Facts,” E.U. Commission.