[Blackleaf]

The UK is now the biggest contributor to the EU budget. Pro-EU people will say "Well, that is because the rich countries must help the poor countries!" However, the UK is NOT the richest country in the EU, but we still subsidise countries that are richer - such as Ireland.

UK first in Europe for contributions
By George Trefgarne, Economics Editor (Filed: 21/03/2005)

Britain may have overtaken Germany to become the biggest net contributor to the EU, the Treasury has admitted.

Gordon Brown believes he is bankrolling the EU

The news comes as the Chancellor prepares for a meeting with his fellow EU finance ministers on Wednesday and Thursday this week, where he is expected to have a serious row. Mr Brown believes that Britain is effectively bankrolling the EU, a situation compounded by its lax accounting system.

According to the Treasury's Red Book, there was a surprise increase of £1.7billion in Britain's payments to EU in the past few months, taking our total net contribution to the EU to £4.3billion.

Figures for Germany's contribution have yet to be published, but a Treasury spokesman said that if it were the same as the £4.1billion last year, "the UK's net contribution would be greater than Germany's if the £1.7billion were added".

More detailed figures will not be published until next month. But, in the meantime, the rise in the cost of Britain's membership of the EU threatens to have serious political ramifications. The Treasury is already forecasting a near doubling to £5.1billion in our net contributions by 2008 and any further increase could add to the fiscal deficit and fuel Tory claims that tax rises are inevitable if Labour wins a third term.

This week, EU finance ministers hope to hammer out the EU's budget. The Commission wants a big increase in order to pay for enlargement and the Chancellor faces a fierce fight to retain Britain's rebate, worth £3.6billion last year. The rebate was granted in 1984 when Britain was one of the poorer countries in the EU, but it is now one of the richest.

Stephen Timms, one of the Chancellor's junior ministers, said last week the rebate is "not negotiable and fully justified." He also released a table in a Parliamentary answer, showing Britain gets less out of the EU than any other nation, a situation he described as "unfair".

The Government is committed to holding a referendum on the EU Constitution. The escalating net cost of membership is likely to be a serious setback for Tony Blair as he campaigns for a Yes vote.

The Treasury hopes the sudden rise in Britain's net contributions is temporary, has been caused by a delay in payments from the EU's structural funds and will be clawed back in future years. But a contributory factor is Britain's terms of membership. Three quarters of all the UK's customs revenue goes to Brussels, and as Britain has some of the biggest entry points to the EU, such as Heathrow airport, payments are escalating.

Mr Brown is also angry at the chaos in the EU's accounts, which have not been signed off by the auditors for 10 years in a row.

The Office for National Statistics said it was £3.3billion in 2003, £300m lower than the Treasury; and the EU itself says in its accounts Britain contributed £1.8billion that year.

[Ombrageux]

You already posted this I believe.

And Germany pays more anyway. Though France and Ireland are indeed overfunded.

[aaker]

Well, the Swedes pay more than the Britons per person, and if you also count how much money the country get back, Sweden is the greatest loser per capita.

[Clansman]

Not saying your wrong about that Aaker, but if you've got a link to back it up that would be good. It is surely the most important statistic in terms of how much a country puts into the EU, the net contribution per person. If Britian is giving the most overall but Sweden, or another smaller country, is giving more per person than Britian, then I would have to say that Sweden would be the greater contributor to the EU project proportionally. By bringing in proportionality in terms of the net contribution per person one is comparing apples with apples rather than apples with oranges. However, to be really fair one would also have to have a measure of the mean relative wealth of the population. As such one would have to make the net contribution per capita proportional to GDP, or perferably GNI, per capita. Surely it is right that those in the richer countries pay in proportionally more per capita than those in the less rich countries who are still net contributors. I.e. if Swedes are generally richer than brits (as I beleive they are by about 40%) then they should be paying in more per person (40% more). It would be just such an analysis that would give a true idea of who really is paying in the most to the EU in relative terms, which surely is the only meaningful and relevant measure of such things as it takes in not only the size of the state but its ability to contribute.

However on this measure the people of Luxemborg should be the greatest contributors per capita as they are the richest member state per capita. That they are not (according to Aaker) would seem to indicate that something is amiss in the relative levels of contributions that states make to the EU budget.

[Prosthetic Conscience]

It seems almost impossible to get agreed figures, but here are some predictions, taken from the European Commission, from an article arguing for the Generalised Corrective Mechanism:

Who would pay the most?

Average Percentage shares of national gni, 2007-2013

Net contributors

Without rebate With British rebate With GCM

Netherlands

0.55 0.56 0.50

Germany

0.52 0.54 0.49

Sweden

0.47 0.50 0.46

United Kingdom

0.62 0.25 0.46

Austria

0.37 0.38 0.41

Italy

0.29 0.41 0.36

Cyprus

0.28 0.37 0.34

France

0.27 0.37 0.34

Denmark

0.20 0.31 0.26

Finland

0.14 0.25 0.20

Source

Which would seem to say that with no rebate mechanism at all, the UK would contribute the most (comparing the contribution relative to the Gross National Income is roughly the same for all the above countries apart from Cyprus as per person); with the existing rebate, the UK does very well; and the GCM would be the most fair system. I believe the British position is that the Common Agricultural Policy distributes the EU funds so unfairly (especially, so much to France, and so little to the UK) that a special UK rebate is still justified.

[aaker]

Clansman, here are some sorces: (in Swedish though)

http://www.nejtillemu.com/faktasvenska.htm

http://www.nejtilleu.se/nyhetsbrev/2001 ... brev13.htm

Why do you think the Swedes are so much richer than the Brits? Actually, i think the UK is richer than Sweden knowadays.

[Clansman]

If you look at the figures for GNI per capita, which is the total income of the state devided by its populaiton you get probably the best idea of the wealth of the citizens of a particular state that statistical measures can currently supply. GNI per capita is higher in Sweden than in Britian. The reason is that although there are a higher proportion of wealthy people in Britian there is also a much higher proportion of poor. In Sweden you have very low wealth inequalities, "lagom" rules in terms of wealth in Sweden. This means that although no Swedish city can compare to London in terms of oppulence (London is the richest region in the EU), the swedish population as a whole are richer per head than the British population as a whole.

EG's post seems to indicate that Sweden is third in terms measure that most fairly estimates the relative and proportional amounts contributed to the EU. Still you do contribute more than Britian currently does.

Why isn't Ireland on the list of contributors for 2007-2013?
Its nice to see the list lengthen but Ireland should certainly be on it.

[Prosthetic Conscience]

Hmm, GNI per capita, 2003:
Atlas methodology:
Sweden 28,840
United Kingdom 28,350

Purchasing power parity:
United Kingdom 27,650
Sweden 26,620

source: World Bank

So it depends on the methodology, but Sweden's GNI per capita is not appreciably larger than the UK's, and is possibly smaller.

[Clansman]

News to me EG, but thankyou for that. Looks about even to me. Still, Aaker was in error about Sweden being poorer than Britain. I travel between the two all the time. When I go back to Edinburgh or Loindon I can see why a Swede would think that Britain is richer, but when I go back through Glasgow I get the distinct impression that it is Sweden that is wealthier. I guess the Glasgows of Britain cancel out the London's and we find ourselves about even.

[aaker]

Should we pay more just because, the wealt is spread more equal?

Many Britons maybe seems to be poorer than Swedes, but actually are much richer, because everything is so expansive in Britain.

[Clansman]

aaker beleive me, you have never seen poverty in Sweden like britian has in some of its inner city areas. You should be very proud of that. The poorest area in Uppsala is Gottsunda, and it has the worst reputation here, but its positively luxurious compared to some of the places in Britain, particularly easter house or paisley in Glasgow. The benefits of having a very long tradition of social democracy I think. And yes if you are richer than the average European then you should pay the same proportion of your income into the EU cofferes as they do which means that you should pay more into the EU in absolute terms than they do. Its only fair and its the basis upon which all taxes, including Swedish income tax, are collected.

[Tangerine]

He’s right. Where I’m currently living, the poverty and degree of uneducated, depressed and suppressed people is appalling. Go to Birmingham, and you’ll see what I’m talking about. It’s horrendous.

[Comrade Ogilvy]

If I remember correctly Norway is paying more to be a member of EEA than EU members pay to be mebers of the EU.



Ohhh the irony.

[Clansman]

I beleive you pay about 75% of what you would pay if you were a member, because you are so rich that's quite alot of money. It was and still is your choice to be part of the EEA. You can join the EU anytime you like, or you can continue with the fax democracy, or you can leave the EEA, the choice is, and always has been, your's.

[Comrade Ogilvy]

Yeah there is people pushing for Norway to leave the EEA. Cant say im against that idea.

[Clansman]

As I say the choice is yours, but as I understand it out of the three options I gave, at the moment there is a slim majority in favour of membership, the staying in the EEA option is the next most popular option with nearly everyone not supporting membership supporting it, and then the leaving the EEA option comes in a very, very distant third. The problem is that the EU is going to be the superpower on your door step, which means that either you are a part of it or you are going to get pushed around by it, just as canada is pushed around by the US, whether you are in the EEA or not. THis would be the same for Britain leaving the EU as well. In the future the EU is going to be about 600 million strong (without Turkey) that makes it over a hundred times the size of Norway. The question you've got to ask yourself is is it better to be a part of that power, or to be its bitchboy? Those really are Norway's only options in the long term.

[Ombrageux]

Norway'll be fine until the oil runs out.

[aaker]

Norway's economy will go even better when the oil runs out because they wont be independent on the flucturing oil price any more.

I think it would be better for Norway to leave the EEA and have special agreemants like Swittzerland (spelling?) instead. Or, offcourse join the European Union, which I think is the best option!

[Tangerine]

What? My friend, no country will do well when oil starts to peak and prices rise rapidly (like they're doing now).

[Comrade Ogilvy]

The problem is that the EU is going to be the superpower on your door step, which means that either you are a part of it or you are going to get pushed around by it, just as canada is pushed around by the US, whether you are in the EEA or not.

Well, we got the means to prevent that. Id like to see the EU boss us around if we stopped exporting oil and gas. We got pipelines going directly to both the UK France and the Netherlands. If we were to cut you off, the prices would rize dramatically.

We are the worlds 3rd largest exporter of fossil fuels.

THis would be the same for Britain leaving the EU as well. In the future the EU is going to be about 600 million strong (without Turkey) that makes it over a hundred times the size of Norway. The question you've got to ask yourself is is it better to be a part of that power, or to be its bitchboy? Those really are Norway's only options in the long term.

We can always do trade with Asia or the US. To be honest Norway Dont need the EU . The only reason we could possibly need the EU is access to its market. But as mentioned Asia could easily replace the EU.