Fact check on the EU Budget.
Date: 2020-09-07
Institutions: Directorate-General for Budget
Subjects: EU budget, EU financing, administrative expenditure (EU), agricultural expenditure, fraud against the EU

FACT CHECK

on the EU budget

1

Who decides on 
the size of the EU 
budget?

The EU budget is agreed on and spent 
in full transparency. 

The democratically elected European 
Parliament and ministers from the 
EU Member States agree on the size 
of the long-term budget and on how 
the EU money will be spent. They also 
check that the money has been spent 
according to the rules. 

By voting in European and national 
elections, you can also have your 
say on the EU budget!

2

Why does the EU need 
an EU budget?

Thanks to the EU budget, the EU 
can pool resources and invest in big 
projects that no Member State could 
finance on its own. Examples include 
the following:

• Large infrastructure projects 

like motorways and waste water 
treatment plants in the EU’s less 
wealthy Member States.

• The European GPS Galileo, which 

is enabled on over 1 billion mobile 
phones, helps in search and rescue 
operations and saves lives. 

• Climate-related actions, which 

account for 20 % of the EU budget 
for 2014-2020. The EU will spend 
even more over the period  

3

How big is the EU 
budget?

The EU budget equals just over 1 % of 
the European Union’s national wealth 
– in comparison, national budgets 
across the EU are equal to, on average, 
about 47 % of Member States’ national 
wealth.

The EU serves 27 countries with a total 
population of 450 million. Its budget 
is comparatively small – just t€150 
billion annually.

This is comparable to the national 

Budget

May 2020

2021-2027, helping the EU to 
become climate neutral by 2050. 

• Protection of the EU external border 
– which is more than three times 
smaller than the land borders of 
the EU’s Member States – and 
prevention of illegal migration. 

• Research that achieves historic 
results, like the first picture of a 
black hole or the vaccine against the 
deadly Ebola virus. The EU budget 
is currently funding research for 
a vaccine against COVID-19, also 
known as the coronavirus.

The EU budget is also about solidarity 
and supporting Member States in 
times of crises. Since 2002, the 
EU has helped 24 of its Member 
States after these were affected by 
80 disasters – floods, forest fires, 
earthquakes, storms and drought – by 
providing over €5 billion.

budget of Denmark, which serves  
5.6 million people, and is about 30 % 
smaller than the budget of Poland, 
which serves 38 million people.

In exchange, EU citizens get a very 
good deal – the EU budget helps 
create jobs, supports projects that 
improve our health, education, roads, 
airports and other infrastructure, 
contributes to the security of our 
borders and helps in the fight against 
climate change.

The EU budget therefore offers 
excellent value for money!

4

What does the EU 
budget do for me? 

Thanks to the EU budget, here in 
Europe we have quality food products 
at our table, can travel more easily 
across the continent because of 
the improved road and railway 
infrastructure and enjoy better public 
services.

As a result of the 2014-2020 budget 
for cohesion policy – the EU’s main 
investment policy:

• more than 44 million people have 

access to better healthcare;

5

Is the EU planning to 
introduce taxes?

The EU is not planning to introduce 
any type of tax on EU citizens. 

National governments and local 
authorities are and will continue to 
be in charge of setting tax rates and 
collecting taxes in the EU Member 
States.

The EU is currently looking at possible 
new ways to finance the EU budget 
in order to fight climate change, 
invest in research and increase the 
security of the EU’s external borders. 
One such option is a contribution by 
governments based on non-recycled 
plastic packaging waste, which should 
encourage people to use less plastic in 
their everyday lives. This is certainly not 
a tax!

• some 7 million students are 
studying in renovated school 
buildings;

• over 1 million companies get 

funding or advice to help run their 
businesses;

• over 420 000 people get new jobs;

• nearly 15 million additional families 
have high-speed broadband internet;

• some 3 100 km of roads are being 

built;

• over 9 300 km of roads are being 

reconstructed.

6

Does EU money come 
exclusively from 
national budgets?

No. About two thirds of the revenue to 
the EU budget comes from Member 
States’ national budgets. The rest 
comes from customs duties paid on 
goods imported from outside of the EU; 
a very small percentage of the value 
added tax collected by each Member 
State; and other sources such as 
contributions by non-EU countries and 
competition fines.

The EU budget is always balanced – 
the EU can spend only as much as it 
has collected. This is why it has to plan 
wisely how much it will spend. Unlike 
in the case of your family budget, 
borrowing is not an option.

The common agricultural policy – which 
also gets funding from the EU budget – 
supports farmers, helps them continue 
producing quality and affordable food 
and makes sure that in the future 
more people will be willing to work as 
farmers.

Moreover, it helps protect our 
environment and Europe’s rich 
biodiversity.

All in all, the EU budget brings positive 
change to the lives of each and every 
one of us.

7

Do some Member 
States pay more than 
they receive?

Yes, some do. However, the EU budget 
cannot and should not be reduced 
to a simple accounting exercise. 
In economic terms, the benefit of the 
single market for each Member State is 
estimated at 5 to 10 times its annual 
contribution to the EU budget.

Thanks to the EU budget, the Member 
States can join forces to address climate 
change, migration or terrorism, or the 
coronavirus and its consequences. And 
thanks to the work of the European 
Union – supported by the EU budget 
– Europeans enjoy the highest data 
protection standards in the world, phone 
calls when travelling abroad are cheap 
and people pay no extra fees when 
shopping with their credit cards around 
the EU.

In a nutshell, the EU budget is not about 
giving and taking. If you like game 
theories, it is not a zero-sum game. It is a 
game in which all of us are winners!

 
10

How much is spent on 
administration?

The main EU institutions employ about 
60 000 officials, which is a relatively 
small number. It is comparable to the 
administrations of some of Europe’s big 
cities.

Some of these 60 000 officials are our 
translators and interpreters, thanks to 
whom people can read about the EU, 
ask the EU institutions questions and 
get replies in their own language – one 
of the EU’s 24 official languages.

Like everybody else, EU officials pay 
taxes, pension and other social security 
contributions, which go back to the EU 
budget.

To get the facts straight – the EU 
does not spend a lot of money on 
administration – only about 6 % of 
the EU budget is spent on salaries, 
pensions, buildings and the running 
cost of all EU institutions. The EU 
budget works to the benefit of its 450 
million citizens and the administration 
is necessary to deliver the best results 
possible.

9

Is there any fraud 
within the EU budget?

Despite the rigorous control systems in 
place, it is always possible to do better. 
Occasionally there are errors in the way 
the EU budget is spent, and sometimes 
people try to take advantage of EU 
money, get hold of it and spend it 
without being entitled to.

The Commission monitors how 
money is spent and takes action if it 
discovers that EU money has been 
spent incorrectly. In 2018, €3.2 billion 
out of the €150 billion budget was 
either recovered by the Commission 
or redirected to other projects – this is 
only about 2 %!

Fraud is a different issue. The 
Commission has zero tolerance 
towards fraud, as well as robust 
measures to prevent, detect and 
sanction it. We do this together with the 
European Anti-Fraud Office (OLAF). The 
new European Public Prosecutor’s Office 
will also be operational by the end of 
2020. It will build on the work done by 
OLAF and look into cross-border cases 
of fraud, corruption and VAT fraud 
affecting the EU budget.

8

Is there any external 
control of the EU 
budget?

Yes! National administrations – which 
are in charge of spending about three 
quarters of the EU budget – are the 
first to make sure that every euro 
from the EU budget goes where it is 
needed. The European Commission 
works closely with them to guarantee 
the money is spent effectively and 
efficiently.

The European Commission also carries 
out its own audits and controls. If and 
when weaknesses are found, the EU is 
quick to address them.

The EU has an independent external 
auditor – the European Court of 
Auditors. It has given a clean bill of 
health to the EU accounts every year 
since 2007, finding them true and fair.

Finally, the European Parliament 
approves the way the EU budget 
has been spent during the annual 
discharge procedure.

11

Does regional EU 
funding only help 
poorer Member States?

Not at all. Every Member State has 
access to EU funding for regional and 
social development, also known as 
cohesion policy. The exact amounts 
for different Member States depend on 
their needs, with less wealthy Member 
States having access to more money 
than their wealthier peers do.

Thanks to the EU’s cohesion policy, 
poorer regions and countries catch up 
with the rest, and their citizens can 
enjoy a better standard of living.

Many of the countries that joined the 
EU in 2004 are economic success 
stories. The economies of most of 
them have grown two to three times 
more than the EU average over the 
past 7 years. The citizens of countries 
like Czechia, Estonia, Lithuania, Malta, 
Slovenia and Slovakia now earn 
almost as much as the average EU 
citizen.

In the richer countries, regional 
disparities disappear.

This shows that cohesion policy is 
effective and helps EU citizens live 
better lives!

12

What does the EU 
budget do in times of 
crisis?

The EU budget helps the EU to react 
and address crises that no Member 
State could address on its own:

During the refugee crisis in 2015-
2016, the EU budget supported the 
Member States where the refugees first 
arrived, as well as other Member States 
that hosted refugees. The EU budget 
also funded measures to stop illegal 
migration to the EU.

13

How much is spent on 
farming?

In 1985 – 35 years ago – about 
70 % of the EU budget was spent on 
agriculture. Today, agricultural spending 
makes up slightly more than a third of 
the EU budget.

For the period 2021-2027, the 
Commission has proposed that less 
than 30 % of the EU budget goes to 
agriculture and that more money goes 
to research and innovation, youth, 
migration and security or climate 
change.

The Commission proposed to 
reorganise and reinforce its budget 
for 2021-2027 to kick-start the 
sustainable recovery of the continent 
and protect and create jobs.

The EU budget is there to help Member 
States in times of crises and help them 
to better deal with difficult situations.

During the coronavirus crisis, the EU 
budget immediately mobilised all 
possible resources to support Member 
States in their response on all fronts to 
contain the spread of the coronavirus, 
support national health systems, 
protect and save lives, and counter 
the socioeconomic impacts of the 
pandemic. 

14

Does the EU budget  
only fund useful 
projects?

Member States are in charge of 
managing three quarters of the EU 
budget. The Commission works hand 
in hand with them to make sure that 
every euro from the EU budget goes to 
projects that add value for citizens. 

15

Is it complicated to 
receive EU funding?

It is true that in order to get EU funding, 
one needs to follow certain rules and 
procedures. This is inevitable – we need 
to make sure that every euro is spent 
in a transparent and correct way, to the 
benefit of EU citizens.

However, the EU is working to simplify 
its budgetary rules and to make sure 
people like you can get EU money more 
easily to finance your ideas. Do you 
want to start a business or help your 
children’s school become more energy 
efficient? Check our guide to EU funding 
or find out more on our website.

© European Union, 2020

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