Budget of the European Union

Main article: Economy of the European Union

2024: The budget of the YeS-27 countries deteriorates, reaching a deficit of 4% of GDP

For Europe, this is a very significant deficit that was previously observed during the debt crisis of 2011-2012 (the average deficit was 4%).

The critical budget deficit balances in the range of 6-7% (6.2% from 3Q09 to 4Q10 and 6.3% from 3Q20 to 2Q21).

After the debt crisis of 2010-2012, Europe began a long process of strict budgetary consolidation with the adoption of a set of standards for budget expenditures and tax increases - as a result, it was possible to achieve a deficit of only 0.4% in 2018-2019.

Then there was the COVID-19 crisis, where Europe showed the greatest perversions in the lockdowns, a couple of years later there was an energy crisis and an inflationary storm - all this together required budgetary support measures. From 2022 to 2023, the average deficit amounted to 3.4% of GDP, but from 1Q23, a trend of continuous deterioration is formed.

Source: Spydell Finance

The expansion of the budget deficit was due to more intensive government spending, which averaged 49.4% of GDP in 2023 compared to 46.6% in 2018-2019, when everything was fine with the budget and due to a slight reduction in taxes and fees, which amounted to 45.9% compared to 46.2% in 2018-2019.

In 2010, the deficit amounted to 0.9 trillion, in 2021 - 0.7 trillion, in 2022 - 0.54 trillion, in 2023 - 0.6 trillion euros.

The national debt of the YeS-27 countries grew to 13.9 trillion euros, in which 2 trillion are loans and 11.5 trillion government bonds, and the rest is domestic debt. For two years, the net increase in public debt amounted to 0.6 trillion euros, and for the year less than 0.1 trillion euros.

In Europe, a complex mechanism for the functioning of the budget through advance payments, deferred expenses/revenues, internal budget redistribution of resources and the use of state assets to finance cash gaps, therefore, the net increase in public debt is not always equal to the budget deficit.

However, the record rates and external funding deficit in 20 years raises the question of internal sources of emission-free financing of the deficit and general budgetary stability in 2024-2025.

2023: Cut budget deficit to 3.2% of GDP in Q1 by reducing energy cost offsets

Europe managed to quickly reset anti-crisis programs to compensate for energy costs, normalizing the budget deficit to safe levels.

Most of the programs to save the economy from the energy and inflationary shock had a validity period from Q3 2022 to Q2 2023 inclusive, but their scale was overestimated, and the validity time, apparently, turned out to be less than planned.

In Q3-4 2022, excessive anti-crisis spending was estimated at 2% of GDP compared to 1P 2022, where an additional 1.7% of GDP and 0.3% of GDP were compensated through various tax incentives and preferences.

The 2022 crisis is not in any comparison with the COVID-19 crisis, when the total state aid was estimated at 10% of GDP in comparison with the norm of government spending and state revenues in 2017-2019, and on average, excess government spending was about 6-7% from 2 Qt 2020 to 3 Qt 2021 (active period), which is comparable to the 2008-2009 crisis.

This time it turned out three times more modest, and the period of active accumulation of expenses lasted only two quarters, because in Q1 2023, almost all valves were screwed up, at least for government spending, Spydell Finance wrote.

The budget deficit returned to 3.2% of GDP in Q1 2023 compared to 4.7% in 2P 2022, 2.6% in 1P 2022 and about 1% of the deficit in the period from 2015 to 2019.

The shift away from stimulus fiscal policy came very quickly (in half a year), which comes amid the ECB's record-tight monetary policy.

2022: Eurozone budget deficit cut to €484 billion

Despite the monstrous energy crisis and inflation in the Eurozone from 2021, the budget deficit there has narrowed. According to official Eurostat data, in 2020 the deficit of the Eurozone countries was 810 billion euros, 657 billion in 2021 and 484 billion in 2022.

The budget problem To Europe is somewhat overestimated, but relevant in the context of the accumulated problems over the past 20 years and the growth of the key rate. ECB

2021: Countries of the North sponsor the South after the COVID-19 pandemic

The EU's Next Generation program - 750 billion euros (915 billion) dollars in grants and loans aimed at stimulating economic recovery - will begin in June 2021, with Southern countries receiving the lion's share. Europe

According to Bloomberg Economics, the program will allocate funding equivalent to almost 1% of the eurozone's GDP annually from 2022 to 2024, with spending gradually increasing from the second half of 2021.

From January 1, 2021, a new tool was launched in the EU to protect the budget from misuse. It implies a reduction in payments to countries that violate the principles of legal. states

2020: Germany and France major donors

Germany in 2020 paid a record amount to the EU budget.

In total, the country, according to the estimates of the DPA agency, sent European Union 19.4 billion euros. In second place in terms of contributions is France from 9.5 billion euros, in third - Italy from 6.3 billion euros.

The main recipients of funds from the EU budget were Poland (received 12.4 billion euros more than it contributed), Greece (5.6 billion euros), as well as Romania and Hungary (4.7 billion euros each).

At the same time, DPA notes that Poland and Hungary received money, despite criticism of other EU member states. In particular, the EU condemned discrimination against LGBT people in both countries. In June, the Hungarian parliament approved a law that restricts children from accessing content that "promotes" LGBT people. And in Poland, questions were raised by the so-called "LGBT-free zones" adopted by some regions and cities of the country.

2017: Donor countries and subsidized countries

There were ten EU members in the 2017 budget who contributed more than they received from the EU, at least in terms of direct cash contributions. The UK ranked second in the ranking with net contributions of approximately 7.5 billion euros. Germany, topping the rating, invested 12.8 billion euros more than it received.

See also

• Budget of Russia
• US Budget