In 2021, Germany remained the largest net contributor to the EU. With around 21 billion euros, the Federal Republic paid a good 40 percent more than in the previous year. Six facts you need to know about payments in the European Union.
The European Union has not published any calculations for the net contributors and net recipients among the 27 member states for the year 2021. Too misleading, she says. Now the German Economic Institute (IW) has stepped in and calculated the data itself – with interesting results.
The net payments indicate which EU members transfer more to the community than the community repays them directly (net contributors), and which states receive more money from the EU than they pay to the confederation of states (net recipients). Until 2019, the EU itself published the net payments annually.
So the data captures only part of the impact of the EU on a country, namely the direct payments to and from Brussels. Consequences of laws, the common market and other measures are not taken into account. Nevertheless, the statistics provide considerable sums and interesting data.
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In 2021, Germany paid around 21 billion euros more to the EU than it received directly from it. This makes Europe’s largest country and largest economy the EU’s main net contributor – followed by France (eleven billion euros), the Netherlands (four billion euros) and Sweden (2.5 billion euros).
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In 2021, 17 EU members received more money from Brussels than they sent there. The largest net recipient was Poland (around EUR 13 billion), followed by Greece (EUR 5 billion) and Hungary (EUR 4 billion).
These rankings roughly correspond to those of previous years: Poland has received the most net money from the EU for over a decade, Germany has paid the most net.
A look at the pure amount of the net amounts distorts the picture. It is obvious that Germany transfers more money to Brussels than the much smaller Sweden. A clearer view of the proportionality of the payments reveals a comparison with the gross national income (GNI) of the countries, i.e. with their total economic output.
Germany also leads this category: with 0.58 percent, the Federal Republic transfers a larger share of its economic output to the EU than the Netherlands (0.48 percent), Sweden (0.46 percent) and France and Denmark (0.43 percent ). However, the difference is significantly smaller than when looking purely at the amount of the payments.
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The gap becomes even smaller when you look at the net amounts that the countries pay per inhabitant to the EU: At 257 euros, the average German paid almost as much to the EU in 2021 as the average Dane (253 euros), Swedes (240 euros) and Dutch people (233 euros). At the other end of the spectrum are the Baltic States: Lithuania received EUR 586 per inhabitant, Estonia EUR 563 and Latvia EUR 478.
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With Brexit, the EU lost an important net contributor: In 2020, the United Kingdom transferred 10.2 billion euros more to the EU than it received back directly from it. Now the remaining net contributors are absorbing this amount, above all Germany and France.
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The Federal Republic paid around 40 percent more to the EU in 2021 than in 2020 – 21 instead of 15 billion euros. In France, net payments jumped into the double-digit billion euro range (10.9 billion euros) for the first time. Most of this increase was due to Brexit.
Compared to the around 300 billion euros that the federal government recently made available for inflationary support, six billion euros may seem small, writes the IW. In contrast to short-term aid packages, however, Germany makes EU payments annually. Since the Federal Republic will pay a few billion more in the foreseeable future than before Brexit, it will have to save the money elsewhere.
With Brexit, the German economy has become even more important for the EU than before. Almost half of all European net payments come from Germany (around 47 percent). A weak economy in this country significantly reduces the European Union’s ability to redistribute funds to other countries.
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As clear as the net payment amounts may seem, IW says readers should not equate them with the EU’s benefit to countries. In the UK, Brexit supporters, citing the net payments, had claimed that leaving the EU would save the country billions of pounds – only to find that the UK would be worse off without the many lost benefits of the EU.
There are four reasons for this:
The net contributor considerations provide a piece of the puzzle for assessing the EU, writes the IW. They by no means offer a complete answer.
Anyone who digs deeper into the data for a closer look at EU payments will find something interesting: In 2020, Italy was one of the largest net contributors to the European Union with around five billion euros. In 2021, the country’s net payments fell to around 1.5 billion euros.
However, this is not because Italy transferred less money to Brussels: In 2021, the country even contributed more to the entire EU budget than in 2020 (around 20 instead of around 18 billion euros).
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Italy’s net balance was significantly lower in 2021 than in 2020 because the country got more money back from the EU. Among other things, Italy was one of the first EU countries to receive funds for the Recovery and Resilience Facility (ARF), with which the European community wants to respond to climate change and the consequences of the pandemic.
All countries will soon receive comparable grants from the funding program, which is endowed with a total of around 725 billion euros. These and similar distributions distort the view of the net payments.
