The Prime Minister has just suffered a negative vote on his proposal to accept a freeze in real terms on the future EU Budget, the Commons saying instead that he must insist on a decrease. This is the subject of such current controversy that it is useful to be aware of the amounts involved.
What currently are the actual amounts involved in this EU budget? ( All figures are in billions (bn) of euros and very approximate.)
1. The total EU annual budget is ?130 bn and its admin. expense ?7 bn
2. The UK contribution is ?11.259 bn plus payment of ?3.750 bn for customs duties, TVA etc.
3. The UK receives back ?6.600 bn in benefits and gets a Thatcher rebate of ?3.600 bn.
4. Thus the net contribution of the UK is ?4.800 bn. This compares with net contributions of ?4.800 bn for France, ?7.500 bn for Germany and ?4.600bn for Italy. Other contributions are much smaller.
Note: the U.K. contribution would be ?8.400 bn without the Thatcher rebate.
5. The major recipients are Poland ?11.000 bn, Greece ?4.700 bn , Hungary, Belgium, Spain and Portugal each receiving about ?4.000 bn.
Added by Administrator
Whether this Commons vote has strengthened the hand of the Prime Minister in his forthcoming negotiations with the other member states is debatable as 17 of them are net recipients and, therefore, unlikely to accept a freeze in real terms on what they receive and even unlikelier to be able to accept a reduction, with all national budgets under pressure. Those negotiating on the other side of the table will also be aware that if they refuse to concede a decrease in the EU budget as proposed by the British as a starting position, Mr Cameron has already made it widely known that he would accept a freeze in real terms.
The Prime Minister needs to get the other major net contributors particularly Germany, France & Italy on his side to avoid being forced to exercise his veto; however, these other major contributors could be looking to trade off in exchange, some concessions by the British relating to other problems within the EU & Eurozone.
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Note: According to this latest Guardian article « Britain’s actual net contribution in 2011 stood at £7.3bn, compared with £6.5bn for France and £11bn for Germany; without the rebate Britain would pay £10.9b« .