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Democrat May-June 2008 (No.108)

How the EU Operates

EU Budget

We will take your money and then send it back
for you to double and then we get the credit

EU Member States collect financial resources on behalf of the EU and transfer them to the EU Budget. This provides the EU with its ‘own resources’ which are raised from four sources:

• A proportion of VAT raised by each Member State amounting to 15% of total revenue which in 2007 was EUR 17.8 bn (£14 bn).

• Duties on imports from non-EU States again amounting to 15% of total revenue and EUR 17.3 bn (£13.6 bn).

• Contributions by each Member State based on 0.73% of gross national income (GNI). This is the largest amount at 69% of the Budget running to EUR 80 bn (£63 bn).

• The remaining 1% comes from fines imposed by the European Court of Justice, taxes on EU staff salaries, contributions by non-EU States to programmes and other sources. This portion amounted to EUR 1.8 bn (£1.4 bn).

EU plaque

Member States have fixed a ceiling on the EU’s ‘own resources’ at 1.24% of the EU’s gross national income resulting in a total ‘own resource’ of EUR 117 bn (£92 bn) compared with Britain’s expenditure of EUR 759 bn (£598 bn) in 2004 Britain’s current contribution to the EU Budget is over £6 billion each year equivalent to £115 million every week. Prime Minister Thatcher negotiated a rebate on the Budget payment which Tony Blair gave away in 2005 raising contributions from £3.5 to £6 billion. In 2004, 45% of the EU Budget was spent on subsidies to prop up the CAP, 30% on Regional Policy, 8% on Foreign Policy and 6% on administration and EU Institutions.

The EU Budget is a big political football which includes repeated calls by Britain to end CAP subsidies. This money is used for payments to farmers in Germany, Italy and France who in return vote in Governments which keep the game going. In practice a quarter of the total Budget, half the CAP money, goes to these three States. Meanwhile workers in Britain in effect transfer money from their wage packets to farmers in other EU States for nothing in return except expensive food.

For many years the EU’s own auditors have not approved the EU’s accounts. The so-called European Parliament cannot write a Budget nor amend one, it can only reject or approve the whole Budget. Great prominence and play is made of the monies Britain receives from the EU much of which goes towards ‘blue plaque’ projects. In reality this is the EU giving back our own money to spend on things that Brussels has decided upon. At the same time Britain has to put up an equal amount of money to that sent back by Brussels. The blue plaques are used to say “look how good the EU is” to keep the game going. Incidentally they have to be in line with EU Regulation 1159/2000. This regulation also applies to any event or publicity related to the EU. Plaques do not mention that half the money was put up locally!

The major cost of administering EU policies, directives, policies and regulations is carried by the EU Member States themselves. Other costs like the imbalance of trade compared with what pertains on the world market have also to be factored into the total cost Britain and its peoples pay to be in the EU. The alternative is simple: do not pay into the Budget or carry all the cost factors involved in belonging to the EU. Just get Britain out so that we can decide what monies are spent and where for the benefit of all the peoples in Britain.