ICAEW chart of the week – EU Budget 2017

Ross Campbell, Director for the Public Sector for the ICAEW, writes:

“This week’s chart continues the Brexit theme by looking at where the money that we pay to the EU is spent.

It shows how Germany, the UK, France and Italy are the largest contributors, with roughly 79bn euros going into the EU pot, while they receive only about 44bn euros of that back.  The majority of their net contributions go toward post-2000 EU members, principally in eastern Europe, while pre-2000 countries such as the Netherlands, Sweden, Denmark and Austria which also pay in more than they get back are substantially balanced by countries such as Spain, Greece, Portugal and Belgium who are net recipients.

Only a relatively small proportion of the UK’s net contribution goes toward the cost of running EU institutions, agencies and programmes. Instead most of the net contribution actually ends up being spent further east, on economic development programmes in Poland, the Czech Republic, Romania, Hungary and Bulgaria. Consequently the focus on how much the UK is going to contribute to agencies such as Europol or the European Space Agency, or to programmes such as Erasmus, is really missing the point – these are small amounts compared to economic development funding for eastern Europe.

It is worthwhile observing that these countries are now NATO allies and all of them made commitments to increase defence spending on the basis of national budgets that assumed continued funding from the UK via the EU. It is also worth observing that with increased tensions between NATO and Russia – it may well be in the UK’s strategic interest to continue to support increased defence spending in eastern Europe.”

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