We use cookies to help improve and maintain our site. More information.
close

February 16, 2018

How big will the euro budget be?

FAZ has a story that the European Commission has, for the first time, put numbers to its proposals for a eurozone budget inside the EU budget. The numbers are truly shocking - as low as €25bn over a period of seven years, which is a little over €3bn a year. The GDP of the eurozone is around €10tr. So we are talking about 0.03% of eurozone GDP. 

The newspapers prefer to talk about billions over several years because this way they get more impressively-sounding numbers. But what does 0.03% of GDP buy?

In a paper setting out various options, the Commission sets out an action plan made up of three components: one of them would be a fund to reward member states for structural reforms. The second component is a convergence facility - financial support for members that want to join the euro - of which Bulgaria would be the first recipient. The €25bn relate only to those two programmes. They are a form of structural funds.

A third component would be a stability facility to deal with asymmetric shocks. This would not be funded directly from the EU budget, but through a fund to be built up over many years. The paper lists four financing options:

  • credits secured on the EU budget;
  • credits directly from a future European monetary fund; 
  • direct contributions from the EU budget;
  • a financial leverage instrument based on voluntary contributions by member states.

The paper notes that while there is a discussion on extended powers of the ESM, these points have not even been proposed, and they are unlikely to be agreed by all 19 euro member states.

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.

 

Recent News

  • October 09, 2017
  • UK is starting to prepare for a no-deal Brexit
  • Why Germany will resist meaningful eurozone reform
  • April 13, 2017
  • Did Russia influence the Brexit vote?
  • All good between Germany and the US now?
  • October 18, 2016
  • The self-destruction of Francois Hollande
  • Brexit psychotherapy
  • At least three candidates for the PvdA leadership
  • The unbelievable hypocrisy of Mario Monti
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • May 25, 2018
  • Rejected by US, Germany is turning towards China...
  • ...and France is turning to Russia
  • UK ties Galileo to security partnership
  • Germans are discovering miniBoTs
  • January 17, 2018
  • Labour smashes No Brexit dreams
  • A new political bargain in Portugal?
  • September 13, 2017
  • Why the Turkey negotiations will continue
  • May 10, 2017
  • PSOE primary campaign in full swing
  • Czech government crisis escalates
  • Backroom dealing on electoral reform in Italy
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • August 25, 2016
  • The costs of Brexit
  • Redefining corruption
  • Greek government shocked, shocked...
  • The costs of Brexit
  • Redefining corruption
  • Greek government shocked, shocked...
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 10, 2018
  • Steadfast Juppé stays true to embattled Macron
  • Sweden’s Democrats and Germany’s AfD: they don’t win elections, but they set the political agenda
  • Is Boris going to challenge Theresa May?
  • August 20, 2018
  • ... and a subtle shift in EU policies towards both Russia and Turkey
  • Nothing to celebrate about the end of the bailout programme
  • Support for Brexit holding up
  • July 23, 2018
  • A Watergate affair for Macron?
  • Irish insist hard border is politically impossible
  • July 04, 2018
  • Trump to confront Merkel head-on over Nato
  • European choices in response to Trump
  • On the paradox of disembarkation centres
  • June 18, 2018
  • Some thoughts on the future of Europe
  • The end of Spanish income moderation?
  • June 04, 2018
  • German discourse out of control
  • Wait for European disunity on US tariffs
  • May 21, 2018
  • Another snap election in the UK? Tories are preparing
  • Merkel and Putin - the beginning of a beautiful friendship?
  • May 08, 2018
  • Macron and the technocratic republic
  • Philippe's silent offer to the SNCF unions
  • On the ordoliberal utopia of a debt-free state
  • April 23, 2018
  • More bad news for the SPD
  • Will Theresa May accept a customs union? The Times says yes. We think so too.
  • A comeback for Marine Le Pen?
  • April 13, 2018
  • German support for eurozone reform next to zero...
  • ... and no support for France on Syria either
  • A French sermon
  • Why the euro endures
  • April 04, 2018
  • On the SPD’s U-turn on Russia
  • What if the UK had adopted the euro?
  • March 27, 2018
  • The IMF's proposals for eurozone reform
  • No concessions from Erdogan
  • Will the UK be shut out of Galileo on Brexit?
  • March 19, 2018
  • Waiting for Germany
  • Russia’s friends
  • Can the Commons force an extension of the Art 50 period?
  • March 12, 2018
  • German industry is starting to panic about Brexit
  • March 06, 2018
  • Will Italy exit the eurozone? Of course not. But it's the wrong question.
  • Slovakia's political crisis
  • Are we heading for a trade war?
  • March 01, 2018
  • A journalist's murder and Fico's administration
  • How should Europe respond to Trump?
  • Why economic survival is not sufficient for the sustainability of the eurozone
  • February 26, 2018
  • Angela Merkel's cabinet
  • February 21, 2018
  • Whom do Wauquiez' indiscretions serve?
  • Latvian claims and counterclaims
  • Some observations about euro-ins and euro-outs
  • February 19, 2018
  • SPD divided over grand coalition
  • Wauquiez - the French Trump?
  • Why Brexit will be extremely hard to reverse