When the press starts writing about budget negotiations, I always read the word “net contributor” at some point. And every time I read that word I am overocme by surprise and bafflement by the lack of either reflection or hypocrisy with which it is used both by journalists and politicians.

First of all, the EU is – by definition –  a community in which solidarity amongst its members is necessary in order to make it work, something which is too often forgotten.

Yet, even without being a “Euro-enthusiast”, there are obvious reasons why the word “net contributor” does not make any sense.

Let’s get the facts straight.

What is a net contributor? Quite intuitively, it is a Member State which is getting less out of the budget than it pays into it. Fair enough.

But is everything that Member States are paying into the budget their own money, or is it sometimes EU resources, which they are in fact just collecting? Quite often, it is the latter.

As the EU has a Common Trade Policy (which allows the EU to be an important worldwide player), much of the EU’s own resources are represented by tariffs.

Hence, some of the net contributors are only collecting monies which are the EU’s and spreading it around. This is especially the case for the Netherlands, where the so-called “Rotterdam-effect” leads to significant contributions.

One could argue that it is this Member State’s administration which has to do all the work, and that it is therefore their money as well – true, and this is why the country is allowed to keep 25% of the tariffs it is collecting. Quite a fair deal I would say.

And how do you quantify how much one gets? Is it only through what is coming out of the budget? Or do budgetary decisions and EU rules have implications which go beyond simple financial transactions?

It needs to be reiterated that the EU is a guarantee for peace and welfare on our continent, something which is worth investing in.

Yet, there are other reasons which show that the term net contributor does not make any sense:

  1. Most of the structural funds also benefit richer countries – first, because structural funds often create infrastructure, which is relied on by all Member States, including so-called net contributors. Furthermore, since many projects are international projects, it is possible that companies from richer countries profit from funds transferred to poorer countries.
  2. EU policies also create social welfare, especially in richer countries – The internal market is a success story for all EU countries, and especially Germany, the largest “net contributor”. Some policies cannot be quantified in budgetary terms, but in the end everybody should know that through EU policies we all get more out than we pay in.

The term “net contributor” is therefore flawed , leading to rebates which make no sense (and not just the British rebate – take a look at the list of rebates at the end of this report) and neither brings the EU closer to its citizens nor helps them to understand it.

– Christian

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