The EU budget: how much does 'bureaucracy' cost?

Last updated: 29 Oct 2012

This morning's Times featured an article jointly authored by Shadow Chancellor Ed Balls and Shadow Foreign Secretary Douglas Alexander which called for the European Union to "spend less and spend differently."

However the duo warned fiscal reform on the continent needs to extend beyond "'EU fat cats' in Brussels", claiming that administration costs represent only 6% of the money spent by the EU.

As you can see from the chart below, this is true. According to the EU's accounts for 2011, it spent €8.4 billion of its €129.4 billion budget on administration costs, some 6.5% of the total.

So where does the Brussels-based institution spend most of its cash?

The area highlighted by Mr Balls and Mr Alexander as being ripe for cuts was the Common Agricultural Policy (CAP). This represents about €44 billion of the €57.4 billion the EU spends on managing natural resources across member states.

Other large areas of outlay include €35.9 billion spent on the EU's economic structure, of which the largest part - €27.1 billion - is spent on meeting the 'convergence objective'. This aims to reduce economic disparities among members states by investing in infrastructure and businesses in Europe's 'developing' nations.

Some of this spending is due to be phased out by 2013, so while Mr Balls and Mr Alexander's figures are correct, we should bear in mind that this can be a moving target.

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