As the European Union is a complex of many functional institutes, it needs to have its own resources to keep functioning. These are set as an annual budget that represents almost 1% from its countries combined wealth. As of 2012 it was set at 147.2 Billion Euro and it keeps growing each year. The EU must have a balanced budget, which means that it should be able to spend what it has available, but without incurring any debt, since it cannot borrow money from other countries or organizations. So let’s see from where the money comes from, and where does it go?
The most important aspect is the fact that the EU is trying to help itself, the “stronger” country helps the “weaker”, it’s a huge effort to trying to eliminate the differences between members, and a form of solidarity in a time of economic crisis that affecting each state, all in addition to financing transnational projects, that promote cooperation between different countries.
The budget has a number of major sources, almost 75% comes from EU member states, which in turn depends on the GDP (Gross domestic product) of each country. 13% comes from tax on imported goods into EU, 11% from the value added tax that is collected from different EU members, and finally 1% comes from other sources, like amends, local taxes and others.
These 140 billion Euros it is not that big of an amount, every year this money is spent on different projects and problems, and with the increasing of the number of countries that make up the EU, all the costs go up as well. It is determined in advance every year by the Council of the European Union, the European Commission and the European Parliament, when it has been voted upon they set the priorities of how it will be spent. In 2011 the expenditures were in many domains: almost 45% was spent on the increase of economy and creating new jobs, which means it was spent on education, training, research and infrastructures. 41% was for the agriculture and environment, 6% for global issues, like helping other developing countries or in case of natural disasters, what’s left, on other projects like security, justice, culture and health.
As we are in the middle of 2012, the European Commission will publish its proposal for the European Union's budget in 2013 as of next week, initiating an argument with the EU's largest member states, which want to see spending reduced. It was expected to increase the 2013 budget by 5% .Some say that the priorities must change, because of the economic crisis in some countries like Greece, Portugal and Spain, for which we should find other plans for saving the day and getting out of the crisis. Other says that we should increase expenditures on the citizen’s interests like health, education and jobs.
Maybe there are other ways to get/spend the money that the EU poses, the inflationary effect in each EU member is clear enough and has its toll on the budget, but also the austerity measures might have an even bigger effect. It comes for everyone to have an opinion about where the money goes and comes from, but still it’s up to the EU organs to decide for us all.