<p><strong>Part A: how much does the UK contributes to the EU Budget</strong></p>

<p>This depends on whether you use fiscal year or calendar year estimates. The figures for the 2015/2016 fiscal year are <a href="http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7886" rel="nofollow noreferrer">here</a>. The key is the following graph:</p>

<p><a href="https://i.sstatic.net/DixEJ.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/DixEJ.png" alt="enter image description here"></a></p>

<p>The calendar year estimates are <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/483344/EU_finances_2015_final_web_09122015.pdf" rel="nofollow noreferrer">here</a>. The following Table summarizes the data:</p>

<p><a href="https://i.sstatic.net/nma45.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/nma45.png" alt="enter image description here"></a></p>

<p>Naturally, <strong>the net contribution is what matters</strong> for analysis the case of "EU budget without UK". However, as both report point out, the UK receives other contribution, which come from an "allocation of funds via competition". Think of the EU having a fund for, say, improvement in infrastructure. Countries apply to this fund, and some countries get it. Well, as the first report says, the UK got £1bn extra through that mechanism in the 2015/16 year. Should this be counted as part of the exercise? Probably not, because those extra funds would have been allocated to another country anyway. </p>

<p>So, given that the total budget of the EU in 2015 was €141,280 million, and taking an <a href="https://www.statista.com/statistics/412806/euro-to-gbp-average-annual-exchange-rate/" rel="nofollow noreferrer">average EUR/GBP</a> of 0.73, the percentage of contribution of UK to EU budget in 2015 was:</p>

<p>$$ \frac{8,473}{141,280 \times 0.73} = 8.2\% $$</p>

<p>Regarding <strong>2017</strong>, table in page 11 shows only the <strong>gross payments</strong>, including the rebate, but not the public rector receipts. As such, the effective contribution of the UK is not going to be 12.5% as the document notes, but lower. Given historical levels of receipts, you could estimate that the contribution of the UK to the EU budget would be perhaps around 9%. In any case, as far as I know, this cannot be known <em>ex-ante</em>, reason why it is not included in the official budget document.</p>

<p><strong>Part B: how would the EU budget change after Brexit</strong></p>

<p>Since this relates to a future event, it is impossible to tell. This is for several reasons:</p>

<ul>
<li>Budget are negotiated annually among all members, and contributions vary accordingly. As such, if countries expect less revenues, they might either lower expenditures, <strong>or</strong> increase demand for contributions to other countries. For instance, immediately after the Brexit vote, speculation arose that <a href="http://www.telegraph.co.uk/news/2016/06/24/germanys-contribution-to-eu-annual-budget-could-rise-by-2bn-afte/" rel="nofollow noreferrer">Germany would cover any hole left by the UK</a>.</li>
<li>An important component of budget (31% in 2014) does not come from individual countries contributions. As such, how these evolve affects particularly how much countries contribute.</li>
<li>Brexit might induce an adjustment on the so-called <a href="https://en.wikipedia.org/wiki/Budget_of_the_European_Union#Correction_mechanisms" rel="nofollow noreferrer">correction mechanisms</a>.</li>
<li>Countries contribution vary over time depending on many national circumstances, including the size of their economy, which then depends on economic growth, uneven across the EU.</li>
<li>The UK is expected to pay the EU before it leaves, known as a "divorce" or "exit" bill, which depends on the outcome of negotiations. </li>
<li>It depends on what deal the UK and EU have after Brexit. A Norway style of deal means the UK would have to pay to the EU.</li>
</ul>

<p>In conclusion, it is simply impossible to tell. The calculations you make are a simple <em>ceteris paribus</em> exercise of removing the UK from the _current EU budget. That might be illustrative, but given the huge uncertainty on the issue, it's probably a rather brute calculation. </p>

CC BY-SA 3.0
2017-01-28T16:43:23.310Z
It's exactly that brute, simple question in ceteris paribus which I'm asking though. I'm not asking for a prediction of what will happen in the future the event. Just whether if you remove the UK contribution that reduces the EU budget by the gross or net amount. No more, no less than that.
768
CC BY-SA 3.0
2017-01-31T22:09:22.133Z
Thanks. Just to be clear, if the net contribution is what the budget would reduce by, is the figure given for the EU budget a total of net contributions, not gross contributions?
768
CC BY-SA 3.0
2017-01-31T22:12:58.037Z
The figure in the budget is "net" in the sense that it accounts for the UK rebate component (see column (7) in Table 6), but it is not "net-net" as it is not including the Public sector receipts.
luchonacho
CC BY-SA 3.0
2017-01-28T16:35:31.340Z
2017-01-31T09:36:07.330Z
2017-01-31T09:36:07.330Z
luchonacho
<p>Would it reduce the budget of some €133bn by the gross amount after the rebate but before any spending from the EU into the UK (€17bn, about 12.5% according to Table 6, Page 11 of <a href="http://eur-lex.europa.eu/budget/data/DB/2017/en/GenRev.pdf" rel="nofollow noreferrer">the 2017 draft budget</a>) or by the net amount, which is some lower figure, (perhaps 6% ?) of the budget?</p>

<p>Assuming no changes due to other countries contributing more, etc. as a result of the UK leaving. It's purely about discerning what proportion of the budget is contributed by the UK's contribution, not what the actual change to the budget will be.</p>

<eu>
How much would the EU budget reduce by after Brexit?
768
# How much would the EU budget reduce by after Brexit?

(Asked by: username_0 on 2017-01-21)

Would it reduce the budget of some €133bn by the gross amount after the rebate but before any spending from the EU into the UK (€17bn, about 12.5% according to Table 6, Page 11 of [the 2017 draft budget](http://eur-lex.europa.eu/budget/data/DB/2017/en/GenRev.pdf)) or by the net amount, which is some lower figure, (perhaps 6% ?) of the budget?

Assuming no changes due to other countries contributing more, etc. as a result of the UK leaving. It's purely about discerning what proportion of the budget is contributed by the UK's contribution, not what the actual change to the budget will be.

**Tags:** eu


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## 1 answers

### Answer by username_1 on 2017-01-28. Score: 7 | Accepted answer

**Part A: how much does the UK contributes to the EU Budget**

This depends on whether you use fiscal year or calendar year estimates. The figures for the 2015/2016 fiscal year are [here](http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7886). The key is the following graph:

[![enter image description here](https://i.sstatic.net/DixEJ.png)](https://i.sstatic.net/DixEJ.png)

The calendar year estimates are [here](https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/483344/EU_finances_2015_final_web_09122015.pdf). The following Table summarizes the data:

[![enter image description here](https://i.sstatic.net/nma45.png)](https://i.sstatic.net/nma45.png)

Naturally, **the net contribution is what matters** for analysis the case of "EU budget without UK". However, as both report point out, the UK receives other contribution, which come from an "allocation of funds via competition". Think of the EU having a fund for, say, improvement in infrastructure. Countries apply to this fund, and some countries get it. Well, as the first report says, the UK got £1bn extra through that mechanism in the 2015/16 year. Should this be counted as part of the exercise? Probably not, because those extra funds would have been allocated to another country anyway.

So, given that the total budget of the EU in 2015 was €141,280 million, and taking an [average EUR/GBP](https://www.statista.com/statistics/412806/euro-to-gbp-average-annual-exchange-rate/) of 0.73, the percentage of contribution of UK to EU budget in 2015 was:

$$ \frac{8,473}{141,280 \times 0.73} = 8.2\% $$

Regarding **2017**, table in page 11 shows only the **gross payments**, including the rebate, but not the public rector receipts. As such, the effective contribution of the UK is not going to be 12.5% as the document notes, but lower. Given historical levels of receipts, you could estimate that the contribution of the UK to the EU budget would be perhaps around 9%. In any case, as far as I know, this cannot be known *ex-ante*, reason why it is not included in the official budget document.

**Part B: how would the EU budget change after Brexit**

Since this relates to a future event, it is impossible to tell. This is for several reasons:

* Budget are negotiated annually among all members, and contributions vary accordingly. As such, if countries expect less revenues, they might either lower expenditures, **or** increase demand for contributions to other countries. For instance, immediately after the Brexit vote, speculation arose that [Germany would cover any hole left by the UK](http://www.telegraph.co.uk/news/2016/06/24/germanys-contribution-to-eu-annual-budget-could-rise-by-2bn-afte/).
* An important component of budget (31% in 2014) does not come from individual countries contributions. As such, how these evolve affects particularly how much countries contribute.
* Brexit might induce an adjustment on the so-called [correction mechanisms](https://en.wikipedia.org/wiki/Budget_of_the_European_Union#Correction_mechanisms).
* Countries contribution vary over time depending on many national circumstances, including the size of their economy, which then depends on economic growth, uneven across the EU.
* The UK is expected to pay the EU before it leaves, known as a "divorce" or "exit" bill, which depends on the outcome of negotiations.
* It depends on what deal the UK and EU have after Brexit. A Norway style of deal means the UK would have to pay to the EU.

In conclusion, it is simply impossible to tell. The calculations you make are a simple *ceteris paribus* exercise of removing the UK from the \_current EU budget. That might be illustrative, but given the huge uncertainty on the issue, it's probably a rather brute calculation.

> **Comments:**
> **username_0**: It's exactly that brute, simple question in ceteris paribus which I'm asking though. I'm not asking for a prediction of what will happen in the future the event. Just whether if you remove the UK contribution that reduces the EU budget by the gross or net amount. No more, no less than that.  
> **username_0**: Thanks. Just to be clear, if the net contribution is what the budget would reduce by, is the figure given for the EU budget a total of net contributions, not gross contributions?  
> **username_1**: The figure in the budget is "net" in the sense that it accounts for the UK rebate component (see column (7) in Table 6), but it is not "net-net" as it is not including the Public sector receipts.  

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