Comparison of the Eu Budget with the Budget of a Typical Member State

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Date Submitted: 11/26/2012 11:20 AM

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Comparison of the EU Budget with the Budget of a Typical Member State

The budget of the EU turns out to be extremely different to the budget of a typical member state, like for instance that of Germany. The first major difference striking the eye is the absolute size of the budget. The EU budget for 2012 in absolute figures is at 147,2bio € which at first glance sounds like a lot. But putting this number in the relation with the German budget, underlines the fact that it is fairly small. That of Germany - so only one single member state - for the same year more than doubles the EU budget and accounts for 312,7bio €. In more general terms the EU budget measured as a percentage of the union’s GDP accounts for a slim 1%, measured as a percentage of all member’s government spending it accounts for about 2%.

But how is this money spent? Starting at the broadest level, the largest fraction of the EU’s money is spent on strengthening the EU’s competitiveness and cohesion on the one hand and on the Common Agriculture Policy on the other hand. Having a closer look, one can see from figure 1 that the EU budget is divided in five major departments: (1) Sustainable Growth (2) Preservation and Management of Natural Resources (3) Citizenship, Freedom, Security and Justice (4) The EU as a Global Player and (5) Administration. With 45,8% of the 2012 budget, the section of Sustainable Growth receives the greatest part of EU means. This department tries to boost both European Competitiveness and Cohesion. Among others it allocates financial means to programs in the fields of Research and Development, Education, Transport, Energy, Employment and Social Affairs. The second most important Union policy, in budgetary terms, is Natural Resources and accounts for 40,8%. Under this heading the EU finances its agriculture, rural development, fisheries and environments. The third asset (1,4%) combines the management of the Union’s external borders,...