How did we calculate the “net balances”?

In principle we calculate the difference between the money sent by each member state to the EU budget and the money the member state receives from the EU budget. All amounts are expressed in EUR (ECU before 1999).

Note regarding calculation of customs and agriculture duties:

In order to calculate how much each country has contributed on import duties to the EU, the sum of all duties paid by European taxpayers is multiplied by member state’s share in imports of goods to the EU. (Before 1995 member states’ share in EU’s GDP as an approximation of country’s share in imports to the EU is used because trade data are not available.) Taken into account is not only the amount that ends up in the EU budget but also 25% of the raised duties that the EU legislation reserves for individual member states to cover collection costs.

These numbers differ from amounts of import duties individual countries collect and send to the EU budget. Our calculation thus avoids the so called “Rotterdam effect” – most of goods coming to the EU is usually declared in Rotterdam or Hamburg – so Netherlands and Germany collect more duties than what their taxpayers pay – because vast ammount of duties paid by importers in Rotterdam or Hamburg is born by taxpayers in other EU countries as the goods move to inland member countries.

Note regarding adding up to zero:

There are some European Union’s expenditures, like external actions (e.g. subsidies to Palestina or Morocco), or administrative costs, that are not attributed to any of the member states. Therefore the sum of all member states’ receipts is smaller than the sum of all member states’ contributions. In other words, member states taken together are net contributors to the EU budget although some member states are net recipients of EU funds.

Note regarding the different methodology used by the EU Commission:

In its EU Budget 2006 Financial Report the European Commission calculates “net operating budgetary balances” in a little bit different way. Therefore the numbers presented on this site slightly differ from numbers presented by the EU. The main difference is that the EU artificially decreases the numbers that represent contributions by member states by a portion that is supposed to cover administrative expenses of the EU and its other outlays that could not be attributed to a particular member state (e.g. money that have been sent outside the EU). Therefore the EU presentation of the net budgetary balances looks as if member countries contributed less than they in reality did. Unlike the EU we do not adjust the contributions sent by member states to the EU in order to look it better.

Also, unlike the European Commission, we take into account redistribution of the so called monetary income between the central banks of the Euro-zone. Also we include among the transfers to the EU’s parafiscal institution – to the European Investment Bank, to the European Central Bank and to the EU’s Research Fund for Coal and Steel. As soon as dividends from these institutions are paid to the member states according to their capital shares, these amounts will be included among receipts from the EU institutions.