Which Country Contributes the Most to the Budget of the European Union?

The European Union is by far the largest economic block in the world. The Union has grown from the initial six members; Belgium, Germany, France, Italy, Luxembourg, and the Netherlands, to the current 28 members. Although the number of states has increased, others are also leaving or showing interest to leave the block. The UK voted to leave through a referendum, while Turkey’s president Recep Tayyip Erdogan stated that he would reconsider his country’s position regarding joining the EU although the country has been seeking to be a member of the Union the past 12 years.

Budget of the European Union

The EU maintains a budget to offset its administrative costs and fund policies such as agriculture, research, and international aid and development. About 6% of the budget is spent on administrative purposes while the remaining 94% is used to fund policies. The Union collects revenue from traditional own resources such as customs duties from non-EU members, 0.3% of the vat collected in each country, 0.7% of each state's resources, and other deductions such as deductions from bank interest, deductions from the staff salaries, and contributions from non-EU members. Controversies surrounding the funding of the Union began in the 70s and is one of the several issues that led to the withdrawal of the UK. On November 24th, 2015, the European Council approved a €143.89 billion budget for the year 2016 while the members committed a further €12 billion to combat the rise in the number refugees streaming to Europe, fight against terrorism, research and growth, and agriculture.

Top Contributing Countries

Germany is the largest contributor to the EU, accounting for 21.11% of the budget. France (16.44%), Italy (13.64%), the United Kingdom (13.05%), and Spain (8.51%) are the other top contributors. These five countries accounted for approximately 70% of the 2016 EU budget. In 2016, the UK contributed £13.1 billion after the UK rebate of £4.5 billion was deducted, however, it only received £4.5 billion, therefore the UK’s total cost was £8.6 billion.

Countries Contributing the Least

Malta (0.05%), Estonia (0.10%), Latvia (0.11%), Cyprus (0.14%), and Lithuania (0.21%) contributes the least to the EU budget.

Effect of Brexit on the EU Budget

The withdrawal of the UK from the EU leaves a gap of about of €10-€11 billion per year according to Günther Oettinger, European commissioner for the budget. Apart from Britain, Germany, Austria, and the Netherlands also received rebates as part of the deal. According to Günther, the Union will reconsider the rebates as part of filling the budget deficit. The European Union budget for 2017 was set at €157.9 billion, but the exit of the UK is set to trigger the Union to reconsider some expenditures. As part of its withdrawal process, the Union has demanded that Britain pay €60 billion as the UK's share of commitments to the pensions of its workers and ongoing projects that the UK had already committed to, but the UK has turned down the request and stated that it would not pay the amount demanded.