IP/05/670

Brussels, 6 June 2005

Contributions to EU Budget reduced again

Member States contributions to the 2005 EU budget will be reduced by a further €526 million. This is the second time this year that the Commission adjusts Member States contributions downwards. Fresh economic data and a surplus in the Guarantee Fund for external actions last year are the main reasons for the modification. In a new amended budget the Commission proposes major changes for Member States such as the United Kingdom, (- €909 million), and Germany, (- €320 million). Earlier in May the Commission proposed a €2 737 million reduction in Member States contributions as a result of a surplus in the 2004 budget. Together with today’s proposal the contribution for most Member States will be reduced.

Dalia Grybauskaité, Commissioner for Financial Planning and Budget, welcomes the new adjustments: “This is good news. This will benefit Member States which will have added resources for national budgets. They also now have a clearer picture of their contributions for this year.”

Data on growth rates, inflation, trade and exchange rates are used to calculate how much each Member State should pay into the EU budget each year. New data shows that 20 out of 25 Member States will see their contributions reduced. The reason for the reduction differs from country to country.

For Germany, slower economic growth than forecast means lower contributions in real terms.

Belgium and Spain have revised their estimated VAT and GNI bases upward, and the net customs duties have increased, giving rise to higher contributions.

For Poland, Czech Republic and the UK, exchange rate fluctuations significantly influenced the budget contribution estimates – up for Poland and Czech Republic, down for the UK. However, these currency-related gains and losses have no direct impact to their contributions to the budget, as payments to the budget are made in their national currencies.

Fresh economic data have also been used to calculate the UK rebate, estimated at €5 185 million this year. The provisional correction one year ago was €5 391 million. The financing of the rebate has been revised for this year and for 2001, providing a net decrease of €60.1 million. This means that the other 24 Member States pay that much less for the UK rebate this year.

A surplus from the Guarantee Fund for external actions (€ 526 million) will be incorporated into this year’s budget. €339 of this amount comes from outstanding sums repaid by new Member States following their accession to the Union in 2004, when they relinquished ‘external’ status.

The overall effect is to further reduce the contributions required from Member States by € 526 million, with the breakdown by Member State adjusted to take account of revised forecast of VAT and GNI bases, and the update of the amount of the UK rebate (see table below).

Contributions to EU budget 2005 by Member State

Amounts in € million – figures rounded to nearest million

See IP/05/571