The EU Budget: Paying to Play

How much is membership in the exclusive European Union worth? A lot more than you get out of it, was the message many candidate countries got earlier this year – and they didn’t like the news. Poland, the largest EU candidate, has mulled pushing off its planned accession into the EU following reports that the country would pay significantly more into the 98.6 billion euro European Union budget in the first few years than it would be getting out of it.

At stake is a 40 billion euro aid package available to the new candidate countries from 2004, when they officially enter, to 2006. During those early years, the candidate countries will contribute a total of 15 billion euro into the budget.

Many of the candidate countries see major flaws in the package, especially in the amount of agricultural subsidies they get. The flaws have contibuted to the sinking popularity for EU entry in relatively well-off countries like Slovenia, whose economy is already performing at close to 100 percent the EU average. Many of the candidate countries are worried that they will do better in 2003, during which they receive aid from the EU for accession, than when they officially join in 2004.

Wary of the trend and eager to solve the financial dispute, the current president of the EU, Denmark, proposed a sweetened financial package in late November.

The new package addresses the agriculture subsidy concern by creating loopholes that would greatly increase the amount of money Polish farmers, for example, receive. Under earlier proposals, the new countries would get only 25 percent of the subsidies current member states receive from the 39 billion euro EU agricultural budget. Under the new plan have access to up to 40 percent of the EU average between 2004 and 2006. Candidate countries will also get close to 1 billion euro extra to pay for border control improvements with eastern countries such as Russia or the Ukraine. The package has been described as too generous by some EU nations.

Illustration Raimo Bergt