General / Off-Topic surprising size of the EU budget.

[beelbeebub]

With all the arguments about the EU and what a bureaucratic behemoth it is, soaking up money that could be better spent by nations on themselves to spend on an administrative gravy train, I thought I'd look up what the EU budget actually is.
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This is not the amount that the UK pays the EU, but the total income of the EU machine from all it's little minion states. As the EU doesn't run a deficit, it's also the amount that is spent on all the subsidies, grants, admin, projects, courts, lawyers and other gubbins.
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I was really shocked to find it is just a shade under €150billion a year (£120million-ish)
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What shocked me was how ​small that amount is.
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£125bn a year.
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For context, the uk government spends nearly £150billion a year on pensions alone. The entire uk gov spend is nearly 5x the EU spend at an out £700bn!
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The EU administration budget for the parliament, council, courts and all the fancy buildings flags, expenses, travel etc, which I thought would be tens or maybe even hundreds of billions, was just under €7bn or around £5bn. For comparison Uk central gov admin costs just over £9bn. If you do the per capita figures the EU spends about £10 per person, whilst the UK is about £ 150 a head.
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The total budget per EU citizen is about £300 a head. That's less than a pound a day!!!!!
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I've no crossed "cost of the damn thing" off my list of decision points, it really doesn't seem like a big deal.

 

[Patrick_68000]

Do not forget that there are only six countries which are big contributors. All the others give tails of cherry

 

[beelbeebub]

Yeah, that is true, and the size of the individual (and uk in particular) contributions is another matter i'll get to, but my main thrust was how little money £125bn is for a population of 500 million or so.
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The antiEU groups always alma of the EU as this giant money sucking machine, yet it's budget is actually pretty small. (about the same as the NHS's).

 

[Finbar]

To put the figures another way, the administrative costs of the EU are about 6% of the total EU budget, see:

https://en.wikipedia.org/wiki/Budget_of_the_European_Union

This is a lot less than anyone just reading the popular UK press would assume. On the other hand those figures alone are a bit misleading as a guide to possible savings for the UK from leaving the EU in two ways:

- it understates the administrative costs of remaining in the EU because national governments also have to spend money at their national and local levels level introducing, implementing and sometimes challenging EU level policies, and these costs naturally do not appear in the EU budget itself.

-but it also by implication overstates the possible savings from leaving the EU too. Firstly the one-off initial implementation costs to the government and civil service of leaving the EU would be considerable in terms of work needed to formulate, negotiate and set up the new arrangements. Secondly even if all the EU level policies were removed the money currently spent on them would not all be saved. That is because many of them would need to be replaced by rather similar national arrangements (about, for example, security cooperation, bilateral free trade agreements and scientific cooperation on space exploration, satellite development etc.) Presumably too the monies the UK gets back for such things as farming subsidies and regional development would in many cases be replaced by national government grants, which would need to be set up, administered and monitored nationally.

I have no idea what the overall financial effect of all these changes on national government spending would be, but those figures are an essential part of the economic argument about whether or not the UK should leave the EU. As far as I know the Leave side have to date produced no account of what they would actually do post-EU about farming subsidies etc. which makes it impossible to cost their position. Conversely the Remain side could through the use of government figures make an estimate of the actual annual costs of staying in, but as far as I am aware have never done so. If anyone knows of any attempt by either the Remain or Leave organisations to provide such figures it would be useful to know where they could be found.

 

[Arry]

With all the arguments about the EU and what a bureaucratic behemoth it is, soaking up money that could be better spent by nations on themselves to spend on an administrative gravy train, I thought I'd look up what the EU budget actually is.
:
This is not the amount that the UK pays the EU, but the total income of the EU machine from all it's little minion states. As the EU doesn't run a deficit, it's also the amount that is spent on all the subsidies, grants, admin, projects, courts, lawyers and other gubbins.
:
I was really shocked to find it is just a shade under €150billion a year (£120million-ish)
:
What shocked me was how ​small that amount is.
:
£125bn a year.
:
For context, the uk government spends nearly £150billion a year on pensions alone. The entire uk gov spend is nearly 5x the EU spend at an out £700bn!
:
The EU administration budget for the parliament, council, courts and all the fancy buildings flags, expenses, travel etc, which I thought would be tens or maybe even hundreds of billions, was just under €7bn or around £5bn. For comparison Uk central gov admin costs just over £9bn. If you do the per capita figures the EU spends about £10 per person, whilst the UK is about £ 150 a head.
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The total budget per EU citizen is about £300 a head. That's less than a pound a day!!!!!
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I've no crossed "cost of the damn thing" off my list of decision points, it really doesn't seem like a big deal.

Once again; it looks like you are trying to sell something. 'That's less than a pound a day!!!!'

Truth be told, no one can explain how money is spent by governments. Be it the UK or the EU. To the rest of us, it is all just numbers and nice big, round, numbers at that. I hate nice round numbers; they reflect, waste, carelessness and corruption.

 

[beelbeebub]

Ha! Does sound like a line from a late night ad for a juicer or something!
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In all seriousness, my aim was to make the big numbers involved more relatable. £125billion would be an enormous sum for a city council, but for an entity covering 500 million people, it's not so much.
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All this started when my parents mentioned they were thinking of voting out. I was surprised and asked why. They usual reasons came up, immigration (surprising as my mum's an immigrant), crazy EU laws and the cost.
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So I started looking into things, as the facts and figures they brandished were very convincing at face value.
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So on the cost I started digging. And one of the things that the out campaign implied was that the EU was this huge entity ducking money away from national governments and spending it on a giant Brussels gravy train.
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It turns out the EU government is only a fraction of UK gov spending.
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On the subject of big round numbers concealing things,I would argue the opposite, you only need a certain level of precision for this kind of debate. If I say a budget it's is about 280million that gives a much better feel to compare with a 7,000million budget than saying A budget of £279,547,654.67 against a £7,511,354,765,345.0. Incidentally thus is exactly what one of the fact sheets mum and dad were given did. By using the figures, including the cents, the numbers looked enormous, when in fact they came to "only" £225million. Which sounds like alot for "communications" aka PR, until you learn that the UK gov spends more on its PR and only has to cover a population a tenth the size in one (ok 2 if you count welsh) language.
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When it comes to these large sums of money, context is everything. £55million might sound a lot of money, I could dine out very nicely on that, share it out across the UK though, and I'd struggle to buy everyone a pack of crisps. Spread it out across the EU and it's a breadstick each.
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On the subject of misleading figures, the big one bandied about is the amount of money UK tax payers have to send to the EU every week: £350million or "enough for a new hospital" EVERY WEEK!
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This horse poop.
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That figure is how big our contribution should be. In reality, we have a special discount (the "rebate"). This amount varies a bit from year to year due to a COMEX formula but it's significant and crucially it's applied before payment. The last year, the rebate took the bill from £350mill (the figure bandied about) to £250million, still a lot but not £350million.
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So the gross payment is £250m a week, which still sounds a lot, but the important figure to look at is always the net. Again things vary a bit by year but taking things like farm subsides, grants etc into account, about £120million a week comes back from the EU, do the net amount the UK tax payer pays to the EU is about £125million a week, still a big number, but a lot less than £350million.
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It's about £2 a person per week set against a UK government spend of over £200 a week per person.
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Obviously there may be other reasons for leaving the EU, but to my mind, a 1%ish saving on the budget doesn't really seem like a good enough reason.

 

[Arry]

Ha! Does sound like a line from a late night ad for a juicer or something!
.
In all seriousness, my aim was to make the big numbers involved more relatable. £125billion would be an enormous sum for a city council, but for an entity covering 500 million people, it's not so much.
.
All this started when my parents mentioned they were thinking of voting out. I was surprised and asked why. They usual reasons came up, immigration (surprising as my mum's an immigrant), crazy EU laws and the cost.
.
So I started looking into things, as the facts and figures they brandished were very convincing at face value.
.
So on the cost I started digging. And one of the things that the out campaign implied was that the EU was this huge entity ducking money away from national governments and spending it on a giant Brussels gravy train.
.
It turns out the EU government is only a fraction of UK gov spending.
.
On the subject of big round numbers concealing things,I would argue the opposite, you only need a certain level of precision for this kind of debate. If I say a budget it's is about 280million that gives a much better feel to compare with a 7,000million budget than saying A budget of £279,547,654.67 against a £7,511,354,765,345.0. Incidentally thus is exactly what one of the fact sheets mum and dad were given did. By using the figures, including the cents, the numbers looked enormous, when in fact they came to "only" £225million. Which sounds like alot for "communications" aka PR, until you learn that the UK gov spends more on its PR and only has to cover a population a tenth the size in one (ok 2 if you count welsh) language.
.
When it comes to these large sums of money, context is everything. £55million might sound a lot of money, I could dine out very nicely on that, share it out across the UK though, and I'd struggle to buy everyone a pack of crisps. Spread it out across the EU and it's a breadstick each.
:
On the subject of misleading figures, the big one bandied about is the amount of money UK tax payers have to send to the EU every week: £350million or "enough for a new hospital" EVERY WEEK!
:
This horse poop.
:
That figure is how big our contribution should be. In reality, we have a special discount (the "rebate"). This amount varies a bit from year to year due to a COMEX formula but it's significant and crucially it's applied before payment. The last year, the rebate took the bill from £350mill (the figure bandied about) to £250million, still a lot but not £350million.
:
So the gross payment is £250m a week, which still sounds a lot, but the important figure to look at is always the net. Again things vary a bit by year but taking things like farm subsides, grants etc into account, about £120million a week comes back from the EU, do the net amount the UK tax payer pays to the EU is about £125million a week, still a big number, but a lot less than £350million.
:
It's about £2 a person per week set against a UK government spend of over £200 a week per person.
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Obviously there may be other reasons for leaving the EU, but to my mind, a 1%ish saving on the budget doesn't really seem like a good enough reason.

So if we stay in the EU, can we get rid of the expense of the UK government? Maybe keep a few steel mills running etc..

 

[EdzUp]

So if we stay in the EU, can we get rid of the expense of the UK government? Maybe keep a few steel mills running etc..

Were in the EU now and the mills are still closing so thats a no on that one i think.

There is loads of hot air on both sides tbh i dont think nobody will ever know the real figures as they are all red taped. One things for sure media is a powerful tool and when you see the EU apparently telling us to change hoovers,lawnmowers and hair dryers because of the noise its this sort of thing people vote with.

 

[beelbeebub]

Regarding EU limit on vacuum power that Boris keeps banging on about, it actually stems from a period in the late 90's when Dyson had just arrived and one of their claims, besides the "no loss of suction" was that their cleaner was the most powerful when you measured "air watts", which is essentially how much air the cleaner moves. This is clearly a useful and relevant measure of vacuum cleaner performance. Electrolux responded by putting more powerful, but less efficient motors in their machines, so they could claim they were the most powerful cleaners, based on their electrical consumption rather than house much air they moved (they moved less). Clearly this was a direction of travel that was bad for the environment. One of their models used 3Kw yet moved less air than a 1500w Dyson! So the EU started working on legislation to limit the electrical power of vacuum cleaners and one of the supporters of this law (because it gave them an advantage) was Dyson, a very British company.
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So there you have the inside story of the EU vacuum cleaner power restriction, and far from mindless bureaucratic meddling it's a reasonable response to a real problem that actually benefitted and was championed by a British company.
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As for the mills still closing despite us being in the EU, the EU did try and raise import tariffs on Chinese steel from the 9% they are at the mo (estimates put the Chinese steel being sold at around 2/3 of it's actual price, so the tariff would need to be 50% to get parity back). However this was vetoed by a group of countries led by......the UK. So it's not true to fully blame the EU for the British steel mills predicament.
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You can dig al the figures up from both uk gov and eu web sites. So the size of the budget, the amount the UK sends and receives are not up for debate. The only variable is how you present them.
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The economic predictions of GDP up or GDP down are much more fuzzy, with both sides cherry picking data and studies. Basically, it's all up in the air, however there was a study dine by the oxford group (eu funded) that looked at 9 different scenarios. A combination of what any EU trade deal would be (ranging from harsh to the UK to favourable) and uk gov response, ranging from economically liberal to very protectionist. In only 1 case (favourable deal and liberal gov IIRC) was the UK better off and only by 1% or so. In the other 8 cases the UK was worse of by values from a percent or so to 4%ish.
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My take is that although it is murky, the balance of probabilities is that the UK would be economically worse off outside the EU.
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I'll go and dig out those references.