EUROPEAN BUDGET


The EU budget for 2010 amounts to 141 billion Euros. The budget is paid with ‘own resources’ and ‘contributions from EU Member States’.

  1. The own resources cover 24 percent of the budget. They consist of 12 percent customs duties and sugar levies, 11 percent of national VAT contributions and 1 percent of taxes paid by European officials and penalties due to breaches of competition policy. The VAT contribution is actually already the germ of an indirect tax which might be increased by the European Union.

  2. 76 percent of the EU budget is fuelled by contributions from EU Member States of which Germany, the Netherlands, the United Kingdom, Sweden, Austria and even Belgium are examples of net paying countries. The negotiations between the EU Member States on the seven-year budget period are always intense. The advantage of this process is that the EU budget increase remains limited in comparison to the introduction of a European tax level, by which the flow of money would come directly into Brussels´ hands.


Implementation of the European budget.

The European Union always says it needs more money, but in reality it cannot spend the current amount of money it has.

In the 2010 budget 49.4 billion Euros go to three major funds: the European Social Fund, the European Regional Development Fund and the Cohesion Fund, moreover 43.8 billion Euros goes to the agricultural sector. Then 7.5 billion Euros is spent on the Seventh Framework Programme for Research & Development and 8.1 billion goes to Europe as a 'global player'.

Only 78 % of the planned expenditure of the Structural Funds of the EU (European Social Fund and European Regional Development Fund), was spent in 2000. In 2001, the figure was 68 percent and in 2002 74 %. The EU could not spend its money!

Then, the EU began to divert parts of the budget in order to increase the spending percentage. In 2008, the European Commission claims a utilisation rate of 97 percent of the European Social Fund, while a portion of the total budget was diverted. The actual expenditure was not 97 percent, but only 80 percent.

The same trick was used with the European Regional Development Fund and the Cohesion Fund. In the latter fund the European Commission diverted a great amount (1.4 billion out of a total of 6.7 billion), but it claimed to have utilised 100 percent of the total budget!

To the written question 2560 / 10 about the reason and the nature of the diversions, the Commission replies that "the payments appeared to lie below the level of the budget". The total remaining 4.5 billion Euros went back to the Member States by ´deducting them from their financial contributions´ to the EU.

The European Commission and European Parliament think an EU budget of 1 percent of GDP 'inadequate', but the EU cannot spend the full 1 percent of the budget over the period 2007-2013. Why would they need more money in the period 2013-2020?

The EU cannot spend its money: therefore there is no need for an enlarged EU budget and no reason for European taxes.

 

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