UK reimbursed in excess of €111 billion by EU since 1985

Margaret Thatcher (2nd from right) attends a YES campaign rally in 1975 for the UK to stay in the EEC. [Dick Roche]

Thanks to the “UK rebate” won by Margaret Thatcher, over the last three decades, the United Kingdom has been reimbursed more than €111 billion from the EU budget, has learned.

But as the campaign for the Brexit referendum is underway, the European Commission missed the chance to highlight the fact that the UK has the best deal with the EU.

Based on publicly available data, calculations show that beginning in 1985, when it was used for the first time, until 2014, the last year for which budget data is available, London was refunded a total of €111,124.10, or £85.5 billion, by Brussels. This is roughly the yearly amount of the EU budget.

Credit goes to Margaret Thatcher, who on 25 June 1984, at the Fontainebleau European Council, snatched the so-called “UK rebate”, by threatening to halt payments to the Communities budget unless she didn’t get a rebate.

Thatcher has been famously quoted for repeating “I want my money back” to the then nine other heads of state and government of the European Communities, hosted by French President Francois Mitterrand at the Palace of Fontainebleau. The Commission President at that time was Gaston Thorn, another Luxembourgish.

In any given year, Thatcher’s rebate is equivalent to 66% of the UK’s net contribution in the previous year. Although it was expected that the UK rebate would fall after the 2004-2007 enlargement, figures show that the reimbursements remained stable and even grew. The high figure for 2001 is mainly due to adjustments to the rebate accounts for 1997 and 1999, which in both cases benefited the UK.

UK rebate 1985 to 2014

UK rebate 1985 to 2014

In recent years, the UK rebate, called the “UK correction” in EU jargon, has fluctuated between €3 and €5 billion annually (see table). Up to 1998, the sums were calculated in ECU. The ECU was replaced by the Euro in 1999, with the actual exchange rate being €1 = 1 ECU.

Even Bulgaria pays for rebate

All EU members pay for the UK rebate, including the poor newcomers from Eastern Europe. For 2014, the last year for which data is available, Poland contributed €294,4 million, Romania €101,4 million and Bulgaria, the EU’s poorest country, pays €29,9 million.

Germany, the Netherlands, Sweden and Austria pay only a quarter of what would otherwise be their share. In other words, they have a “rebate on the rebate”. The result is that France and Italy pay about half of the total. For the year 2014, Germany has paid €379,6 million for the UK rebate, compared to France’s contribution of 1.592 billion and Italy’s of 1.165 billion.

David Cameron has attempted to follow in Thatcher’s footsteps. At the December 2010 summit, in the middle of the eurozone crisis, he secured the agreement of other member states that London will not contribute to future bailouts.

Asked to comment on the magnitude of the UK rebate, and the unique nature of London’s deal with the rest of the EU, a Commission spokesperson said it was inappropriate to make such comment during an EU referendum campaign.

The fact remains that when British voters go to the polls on 23 June, they could scrap the best deal any country has with the EU.

Thatcher-style, Cameron says: We won't pay

UK Prime Minister David Cameron can claim a victory at the 16-17 December summit which perhaps went unnoticed by the general public but was considered resounding by experts: the summit conclusions state that Britain has secured other EU countries' agreement that London will not contribute to future bailouts.

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