If the EU survives this, it’s going to be much smaller
Revealed : The ticking time-bomb of an economically (and morally) bankrupt EU
© Brexit Facts4EU.Org
In the quiet Coronavirus corridors of Brussels no-one wants to even whisper the word “insolvency”
The EU as an institution gets its money from its 27 Member States plus the United Kingdom. With national economies collapsing all over Europe, the EU’s income looks like being slashed just when it was asking for a pay rise.
In light of reports now showing EU economies contracting by as much as 30% in April, Brexit Facts4EU.Org asks the obvious and awkward question.
If the EU were a company, would it now be unfit to continue to trade?
The moment the directors of a company believe that their business will be unable to meet its liabilities, they have an obligation to cease trading. Readers will be familiar with the term "a going concern". In essence a business must have a reasonable prospect of continuing to trade.
The EU as an institution makes payment commitments on a daily basis, spending the cash of hard-working taxpayers from all across its Member States… plus the UK (see below).
The EU plans its grandiose projects in advance, redistributing wealth from countries such as the UK to other EU countries - and to countries which are not yet even members of the EU, such as Albania. When the EU commits funding, it does so on the basis of what it expects to receive from Member States, plus the UK. But what happens when something like the Coronavirus comes along?
What happens when large parts of the economies of the EU’s Member States go into ‘lockdown’
and cease to produce wealth?
Where is the money going to come from, to pay for the EU’s ever more profligate projects?
A quick reminder of how the EU is funded
The EU receives a percentage of the revenues of various activities of its Member States. Below we present a reminder of how the EU as an institution is currently funded. The EU does not make anything. It does not generate wealth in itself. It takes its funding from the citizens of its Member States.
As ever, we have used the latest information from the EU Commission itself.
Brexit Facts4EU.Org Summary
Very basic breakdown of EU funding from British taxpayers,
and from those of some of the EU Member Countries
The UK continues to fund this, as if it were an EU Member, but with no voting or veto rights
Figures are for 2020
© Brexit Facts4EU.Org - click to enlarge
- €110.5 bn (72.0%) from taking a percentage of the GDP of each Member State
- €22.2 bn (14.4%) from Customs tariffs on all goods imported into the EU
- €18.9 bn (12.3%) from siphoning off a percentage of the VAT collected in each country
- €1.9 bn (1.3%) from fining countries like the UK, and other means
- TOTAL (100%) IN 2020 : €153.6 BILLION
What happens to the EU if the economies of Member States contract by 10-30%?
In one word, the answer is “Oops”. With national economies tanking, the following will happen to the EU:-
- Its fixed percentage of the GDP of its members’ economies will produce a much smaller amount
- If EU countries import less, the EU’s revenue from customs import duties will fall
- In a recession, people consume less and so the EU’s share of VAT will be of a much smaller pot
Not only will expected revenues for the EU decrease dramatically this year, they will also decrease dramatically for many years to come. This will have a huge impact on the EU – and these ramifications have not even yet begun to be spoken of publicly.
Before the Coronavirus crisis started, the EU was already in a crisis of its own, unable to agree on the new EU budget. In February the EU Council met (without the UK of course) and failed to come close to any agreement on the EU’s budget for the next seven years from 2021-2027.
Even before the Coronavirus effects were being felt, the “Frugals” (the generally northern EU countries from what used to be known as ‘the West’) were pushing back on the EU Commission’s latest budget proposals. In the end it is the governments of the EU Member States which decide these things, no matter what the EU may try to say about the involvement of the EU Parliament.
That all happened before the worst effects of the Coronavirus measures were being felt. In the new climate it would seem that the EU Commission will have to rewrite its budget proposals completely.
Finally, a reminder: Are UK taxpayers really still funding the EU?
Although the United Kingdom is technically no longer a member of the EU, the UK is still paying in as if it were. On top of this, the UK is also still one of the minority of countries paying in much more than it gets back.
On December 31 2020 this is set to change… unless full Brexit is delayed because of the Coronavirus.
The EU Commissars denied financial reality when we voted for Brexit
In 2016 when the British people voted to leave the EU, the fanatical ideologues of the EU Commission and the EU Parliament were in denial.
For years they thought they could thwart the decision of the British people, just as they had done on numerous previous occasions with the French, the Danish, the Dutch, the Irish, and others after they had rejected the EU’s plans in one form or another.
With Mrs May and her Europhile Cabinet, including Chancellor Philip Hammond and his arch-Europhile Treasury, and the arch-Europhile metrocentric media and every other part of the soi-disant “elites”, the EU almost got away with it.
During this period the EU Commission made NO attempt to reduce its outgoings after the British people’s vote to leave the EU – they remained in complete denial.
The EU Commission are now denying the economic reality of the Coronavirus
Whatever the rights and wrongs turn out to be, the handling of the Coronavirus in the UK and in all other major countries will have a dramatic impact on the EU’s revenues. Are they working on this? Are they trying to cut back on their expenditures?
If they are, we have not seen sight nor sound of it. The EU looks set to be a whole lot smaller following this meltdown, whether the EU realise it yet or not.
We will certainly shed no tears.
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[ Sources: EU Commission Budget Directorate ] Politicians and journalists can contact us for details, as ever.
Brexit Facts4EU.Org, Tues 07 Apr 2020
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