EU budget

How the money is spent by country - €114bn

The EU spends more than 100 billion euros each year on projects ranging from farming to foreign aid. Click on the buttons to see how much different countries benefited in 2007.

overview chart

Overview - 114bn

The European Union is expected to spend 133.8bn euros in 2009, or 1.03% of its members' gross national income.

The vast majority will be spent on aid to farmers, rural development and aid to poorer regions.

The European Commission puts forwards a budget which is approved by the European Parliament before the start of each year. At the end of the year a report on budget spending is released and an audit takes place. However, the final financial report is not published until half-way through the next year. The most recent final financial report is for the 2007 budget when the EU spent 114bn euros.

Here we concentrate on money that was actually spent within the European Union in 2007.

The final report makes a distinction between money committed and actual payments. Some money will have been committed but not spent that year, while some will be committed for spending in future years.

overview graph
agriculture chart

Agriculture - 53,500m

Agricultural subsidies and rural development projects swallowed 47% of the money spent by the EU in 2007, with France receiving the largest share.

France has traditionally been the biggest recipient of these funds but if this spending is worked out as a percentage of gross national income (GNI), then Lithuania and Greece top the table, receiving 1.8% and 1.6% of GNI. By this measure France in 12th place receiving 0.6% of GNI.

As a rule, agriculture plays a larger economic role in the new member states of Central Europe than it does in the more developed economies of the older members. Soon countries like Poland will become significant recipients of agricultural funding.

However, it takes time for new member states to reach full subsidy levels. Farmers from the 10 states that joined in 2004 will not receive the full subsidy until 2013. In the first year after joining the EU they received 25% and in 2007 they received 40%.

agriculture graph
regional aid chart

Regional aid - 37,974m

Regional aid is the second biggest item in the EU budget, accounting for 32% of spending in 2007.

Most of it is used to boost the economies of poor, remote or under-populated parts of the European Union. In Germany it goes mainly to the former East Germany, while aid to Italy goes mainly to the south.

Spain, Portugal, Ireland and Greece have traditionally benefited most from these funds, but the accession of 12 new states since 2004 has led to a sharp fall in the average wealth of EU countries.

As a result, of the older EU member states only Portugal and Greece remain poorer than the EU average. Portugal's regional aid grant is down from 2.6% of the country's gross national income in 2004 to 1.6% of GNI in 2007.

Spain has become a relatively well-off member of the expanded EU and faces a sharp reduction in its share of regional aid funds in the future.

regional aid graph
foreign aid chart

Foreign aid - 7,292m

The EU is the world's largest aid donor, if you include donations by individual member states.

Within the member states, spending is mostly focused on the countries along the EU borders. This money funds cross-border projects to foster good relations with neighbouring countries, which may also receive direct funds for other projects. Money is also given to candidate countries, such as Turkey and Croatia.

Development aid goes to reduce poverty and boost economic development in Latin America, Asia, Central Asia, the Middle East and South Africa.

How foreign aid is divided
foreign aid graph
administration chart

Administration - 6,806m

The administration budget covers salaries, pensions, buildings and equipment. As much of the EU's work takes place in Belgium and Luxembourg, almost three-quarters of the spending is allocated to these two countries.

The total cost of running the EU falls somewhere between the budget of the Mayor of Paris - 7bn euros in 2008 - and the Mayor of London 4.2bn euros (3.2bn) in 2009/10.

The European Commission accounts for about half of the total spending on EU administration employing around 33,600 people in 2009.

Commission staff can claim a range of allowances, including for living abroad, travel home and their children's education.

administration expenditure
administration graph
research chart

Research - 4,059m

The European Research Council uses its funding to attract researchers from all over the world in fields including health, nano-technologies, the environment and energy.

The EU's spending on research and technical innovation dates back to the mid-1980s, when the US and Japan were recovering quickly from the post-1979 recession partly through their investment in new technology.

The US economy's recovery in the mid-80s also saw investment moving away from Western Europe, raising fears that the EU could be left with an obsolete industrial base.

In 2000, the EU launched the Lisbon programme with the aim of becoming the world's most advanced knowledge-based economy by 2010. It proposed spending 3% of GDP on research by 2010 but is falling short of that target.

EU research funding also hopes to increase co-operation between member states by giving priority to projects that bring together research centres, companies and universities from different countries.

research graph
education chart

Education - 959m

The EU will invest around 7bn euros in education projects as part of its 2007-13 learning programme.

A variety of projects cover everything from schools and adult learning to vocational training schemes and assistance for students who wish to study in another EU state.

The idea is to help EU countries improve the skills base of their workforce, equipping them to remain competitive with countries such as China and India in areas such as bio-engineering, pharmaceuticals and high-technology manufacturing.

Projects also exist to enable easier comparison of qualifications between countries, as this would give employers more confidence to recruit from other member states.

education graph
crime & border control chart

Crime & border control - 212m

In 2008, the EU received almost 240,000 asylum applications and many thousands more people were smuggled illegally across the EU's land borders and through its ports.

In 2007, the EU spent 69m euros on managing immigration and asylum issues. Most was spent on developing a co-ordinated approach to border control, through the European external borders fund, and assisting refugees.

Another 93m euros was spent on various crime and justice agencies and 5m euros on projects to improve co-operation between European police forces around and on efforts to protect against terrorist threats.

Frontex, the Agency for Management of Operational Co-operation at the External Borders, which is at the forefront of the battle against illegal immigration, is based in Warsaw. This explains why Poland is at the top of this graph.

Other EU agencies in Austria and Portugal account for a significant portion of the money spent in those two countries.

crime & border control graph
other chart

Other - 4,151m

Other spending is spread across a wide range of activities, including 750m euros to the European Fisheries Fund, 114m euros for biodiversity and environmental projects and 197m euros on a European disaster fund.

Some 640m euros were spent on various citizenship schemes, including Youth in Action, Citizens in Europe and cultural festivals, and 381m euros went on the development of trans-European transport, energy and telecoms networks.

Other spending also includes compensation to new member states in the first few years after they join the European Union.

In 2007, the new member states receiving compensation were Bulgaria, which received 129m euros, and Romania, 315m euros.

The compensation payment is made because it will be a number of years before they are included in payment schedules for many of the existing financial programmes, so they risk paying significantly more into the EU budget than they receive.

other graph

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