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Europe: Quantifying The Donors And Moochers
With the dramatic emergence of intra-EU bickering between various "banana-eating countries" and "tax cheats", it is easy to lose sight of the forest for the banana trees. While it is subjective to say who owes whom what, one thing that is very objective, is whose money is critical to sustaining the European Union. And here there is no doubt: without Germany, the EU would not exist. The country, which receives €78 billion from the EU annually, pays out more than double that, or €164 billion, for a net impact of (€1,045) per capita. Surely the Germans would be just as happy to see this money retained by their economy instead of going to assorted hangers-on. And speaking of the latter, one of the biggest recipients, with a net benefit of €2,284 per person, is Greece, which pays just €15 billion a year to the EU but receives nearly triple, or €40 billion. We wonder just how Greece will plug that particular hole should the EU dissolve after the recent escalation in rhetoric threatens to royally piss off the Germans.
Graphic via FSTeurope.com
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Well, yeah, we get a lot more than we put in, but I'm an anarchist, and still have to live with my parents...
"receives nearly tripe"...indeed...
That is an awesome infographic.
on the graph and the text i missed per year
or second for a joke. be precise, please.
It looks cool, but using a triangle to represent a single number is visually confusing. Simple bars would have been more informative.
It seems that a Franco-Prussian Alliance, plus the Axis power Italy, would be a better configuration. Or just Deutschland Uber Alles, like usual. But look, the USA has to carry the bill as the World's Globo-Cop, so why shouldn't the Krauts have to carry their "United States," eh? The high cost of the illusion of group security. It wrecked us, let it wreck the Huns.
Great point.
TD - great post, but it's much more complicated. Germany has a massive intra-EU trade surplus, clearly helped by the monetary union and the associated reduction of trade frictions. Would they be able to export as much to Europe in the absence of monetary union? Are you telling us they are acting irrationally by perpetuating a system in which they do not benefit?
It's worth exploring the deeper German motives and incentives in order for us all here on ZH to figure out how this is going to resolve itself.
Peace. CW
+100
Shirley, pay the man.
while all 'we all' care about is the sexiness of Greece / PIGS et cet ... its important to remember 'why' little shit countries such as Greece are w/in the EU, which is bc of socio-cultural and socio-political reasons, not economic.
on its face one could make the argument that the EU / EMU block is competing against US, etc. (bodies n bank accounts) but its really just simpler than that in terms of inclusion. has it been so long that this has been forgotten? outside of 'this', why would turkey (which never had any chance at admission) be discussed so ... outside of this very point, socio-cultural inclusion w/ a small socio-political sub-motif, there ain't reason for em. simple? maybe. glossed over for sake of brevity? sure. but at day's end, is a summary of what EU intentions were.
"...bc of socio-cultural and socio-political reasons, not economic."
I don't know ChopShop... Nobody does anything unless there is a buck involved... or in their case a Euro.
As we plainly see, every Gov't policy has a Klepto profiting off of it at public expense pushing the policy through...
Every war is at root an economic looting at one level or another. Every war has a dominate economic cause. You can leave the "good war" "just war hypothesis" at home in the propaganda trash bin where it belongs.
If there was no economic benefit, do you think they would all be in a common market... or just sitting around like the Stooges poking each other in the eye?
When I read your posts you are pretty well versed in European matters... So wouldn't this be a tough union to hold together with out economic profit?
What a stupid stupid club to be a member of. They should have joined a swinger's club instead.
Tell that to Tiger
Hmmm it looks like the big winner per cap is Lux. Got to wonder how they pulled that, it's not like they are a "poor" nation.
Banking service charges...
Great graphic, great info - thanks for sharing!
Where does all the money go? Seems to be a lot more red on your chart than black.
Wouldn't it be fun if we start doing this with our states? While the EU falls apart, we could be having Civil War II.
To all the simpletons out there bashing Greece, I have a question for you. WHY does Germany support these great imbalances? Have the Germans become so charitable all of the sudden to hand over money to their European neighbors? Why???
Look beyond the curtain to get get your answers.
Ooh! Ooh! I know! They'll borrow it!
In aggregate (without actually totting up) it appears a lot more is paid in to the EU than ever re-emerges to anyone.
That is an interesting set of figures - its a shame they made such a mess of the graphic - at first glance it looks like Germany pays 4 times what it receives, which is not the case.
Dear ZH and Company Ltd.:
I.M.F. Chief Suggests Look at New Reserve Currency
February 26, 2010
http://www.nytimes.com/2010/02/27/business/27imf.html
"The Treasury Department pointed to its most recent semiannual foreign exchange report , released in October. That report stated that “as long as the United States maintains sound macroeconomic policies and deep, liquid, and open financial markets, the dollar will continue to be the major reserve currency."
In other words, it's over.
same analysis for the states vs. Federal Gov't?
http://democraticactionteam.org/redstatesocialism/
This proves nothing.
Correlation is not causation.
well said, Link.
that said, good luck getting that uber-basic fact across when gold is anywhere near the convo. news helps create idiotically specious reason such that folks can readily digest what they refuse to accept / can't understand.
The real question with this is, why? Perhaps the long-term effects of NIMBY? Military and NASA spending, which seems to be heavily concentrated in the south?
So basically there are four countries here with real economies: Germany, France, Italy, and the U.K. Everyone else is sleeping on their couch.
Scratch Italy:
Euro "Creator" Robert Mundell: Greece Is Not Biggest Threat To Euro, Italy Is.
02/17/2010
http://www.zerohedge.com/article/euro-creator-robert-mundell-greece-not-...
Well played.
Why would the Germans be any different that the Americans ... we sit around and let the Government make us (and generations to come) indentured servants ... the world is pretty up-side down right now
I suspect it always has been.
It's a wonderful club - excellent value for money. We get about 3000 new regulations a year, and I believe that there are over 10000 pages of law for the UK alone. How could we possibly have spent all that money more effectively. What's more, the European President is a titan amongst men.
http://www.youtube.com/watch?v=sxESjGmqqw4&feature=popular
Remember, ignorance of the law is no excuse.
ROFL on the video. Nigel Farage is my new hero. Very few people have the guts to say the truth so openly, to a "President" no less. I wish somebody would tell Obama to his face what the country REALLY thinks of him. BTW, the EU is finished IMHO.
Gordon be careful of Nigels populism - he is a former banker and believes that taxpayers should subsidise bank bondholders for their mistakes . He is a representative of a older home counties establishment that was indeed more responsible then the newer bunch but never the less he cannot imagine bankers taking the loss for their mistakes.
That British guy in the video must not have had much of an argument, if that is all he has to say.
On internet chatrooms you see the same thing, once you win an argument the other guy says something like "but you don't know how to spell".
slightly OT but I gotta give FST a +1 for damned good graphic design. financials tend to have such boring graphics but this is fantastic.
No, the graphics are a mess. They have taken linear measures and represented them by squares.
But aside from that, they're pretty enough.
A bit off topic, but isn't it the opposite in the States? Where California pays more in federal taxes than it receives yet is also on the brink of default? I only bring it up since so many like to point out that California's potential default is larger than that of Greece, but is it really a similar situation?
In any event the whole thing is quite fascinating.
When you come right down to it, the benefit that Germany receives from the EU is twofold.
Firstly (the obvious), it rids itself of tariffs on its exports within the Eurozone.
Secondly (the less obvious), it gets a security buffer. Germany is a major power with no natural defensive boundaries (think oceans - US/UK, Mountains/Oceans/Geographic isolation - China, Mountains - Switzerland ...) and many natural competitor nations around it. Just like the USSR post WWII, the Germans need a buffer to feel strategically safe and not remilitarize. Unlike the USSR, Germany has acquired their buffer with carrots instead of tanks.
So here is the ultimate question(s):
1. Is Greece integral to either Germany's export trade OR its security? Probably not.
2. If Greece is forced out of the EU, will it force other members out with it? Unknown, BUT wouldn't it be better for Germany (and really France) to save the integral countries then to waste all of their resources (including political capital) on the peripheral countries? The only way to answer that last question in a NO is to assume that Greece is the first (AND ONLY) domino and that you can save money in the long run by propping up Greece.
So, long story short, the worse things get in other countries, the less likely it is for Greece to get propped up.
No,it is not a matter of charity. It is simple stupid foreign policy vision. As always,time and again Germans prove to be stupid and naive when it comes to foxy politics. While they were always superior to the English in matters of idustrial precision and military planning and brilliance,they lost two wars with them simply due to dumb political visions(occupying Russia?Just plain stupidity that absolutely has no chance of success anyway you want to look at it). I guess Kohl forsaw the demise of the Soviet Union,and thought best to integrate Europe under the German ubrella to be better situated to face the assault of the giant corporate America. But he could have done much better by concentrating on building bridges with the new Russia,guaranteeing cheap resources and labor,and by passing the immediate neigbors of Poland or Ukraine. As far as Europe,there was some kind of cooperation even before the EU. There was absolutely no need for them to get into that complicate project. Just like the ill advised Daimler purchase of Chrysler.
nice colors, but wake me when the situation gets more like a miro:
http://www.moma.org/interactives/exhibitions/1998/miro/index.html
for sure. no contest.
DONT BELIEVE THE HYPE
This is being manufactured to bring about a more integrated European Union..
To form a new system you have to smash the old....Didn;t someone just
recently promise change.... Go through history crisis always lead to more centralized forms of control...Sick and tired of the stupidity that a little country like Greece is going tobring down the EU....NONSENSE...every crisis needs a scapegoat...
Lisbon Treaty 2 with multi-tiered membership.
Non sense but this is what a large part of the audience wants to hear.
Dissolution of the EU has always been a wet dream in Britain and the US as it would kick a major sink of consumption out of the picture. And there is a race in consumption. Better to consume the Earth now than in two decades. And a major sink out now means more for the others right now.
Besides, in the western world, people are not supposed to jump at a weakened nation to take advantage of. In the west, people like to believe they help people in need and certainly not help themselves by jumping at the opportunity to put shackles on the weakened. This is what dictatures do. Not western countries.
This plus the fact british, US people want to believe and hear that the EU is going to collapse...
Germany is a mercantile state within the EU - it has a huge trade surplus from selling high value goods to other EU countries - these goods are more dependent on credit then lets say agricultural goods of which France is the biggest most high value producer.
The savings from this German surplus has been badly invested in paper in the deficit countries of Europe and will turn sour very soon - it should have invested its surplus in a energy independence policey but the German Hippies could not make a rational decision about nuclear power.
Instead it increased its investment in the production of optional consumer goods and now has a overcapacity problem not unlike China.
The lesson from the Great Depression Mark I is that surplus countries suffer bigger falls then deficit countries but in Europe we are all in the mire because we share the same currency - Germany get into the Sty with the rest of the PIGS and lets play in the muck together.
maybe you should at first find out what the word mercantalistic means before you use it. Being the worlds foremost producer of high end manufacturing doesn't make germany a mercantalistic state.
Germany’s Export Prowess Weighs on Euro-Zone
http://www.nytimes.com/2010/02/27/business/global/27gcon.html?utm_source=twitterfeed&utm_medium=twitter
You are suggesting asdf that Germany achieved its export potential through its own merit and indeed I have some sympathy with that opinion - but even though we have all the same currency the old Frankfurt establishment calls the shots in the ECB and their low interest rate policey was favourable to Germany over the last decade and was catastrophic to admittingly feckless peripheral neighbours.
Whatever the rights and wrongs of the present situation it is obvious that Greece , Spain Ireland etc will have to reduce consumption but that outcome will kill off large sections of German Industry and they will have to use their remaining and dwindling savings to reduce imports of energy to square the circle of their flawed industrial base.
Try selling some product made with advanced technology to German companies. Your technology will be copied by a rival German firm and your prospective clients will buy from the German company rather than from you. That is mercantilism, and it is alive and well in countries with big trade surpluses - like Germany, Japan and China.
Calling BS on - at least - part of the figures in the graph.
I haul from Romania and there is no way, absolutely no way that this country receives 32 bil. euros p.a. from the EU.
Even the 7 bil euros p.a. sent by Romania to the EU is an enormity (the actual sum is about 1-1.5 bil euros p.a., and at least between 2007-2009 this country was a net contributor, not a net recipient).
Because, even should the EU "allocate funds" for member states, the actual money are not guaranteed to reach them at all. There's more to the EU than meets the eye.
With EU, what they've succeeded in doing is creating the biggest bureaucracy in the history of mankind.
we must be related :)
Keep kicking the anthill. Hurry scurry, boil and bubble.
Oh what fun to stir up trouble!
Misery loves company
Devilish details for all to see
Fact or fiction place your bet
What you "see" is what you get
Thankyou tylers for a laugh
my trading booboos are my gaff:)
If you wake before you die
Have a piece of yummy pie:)
40muleteam borax
The EU is a bureaucratic nightmare!
The institutions without real power cost as much as any federal institution inside each country. Imagine a federal apparatschick on top of the US federal bureaucracy.
Americans don't realize just how intrusive the entire EU paper colony is in Brussels and Strasbourg.
IF the EU collapses and the Euro disappears.. Germans and French will still build planes, trains and automobiles.
Where is Sweden on that chart?
Glad someone else noticed too:
http://europa.eu/abc/european_countries/eu_members/sweden/index_en.htm
Whats to worry- Greece? Spain?
The Greek [EEEk] crisis is all our esteemed Fed Chair needs to turn Messr Trichet from a pesky kibbitzer into a willing vassal.
QE Euro-style, kind of like doggy-style, here IT comes
Incedibly bullish for various sorts of instruments
If Europe breaks up over this then so will Canada. My province receives at least a thousand dollars per person from the rich Provinces.
No wonder the Brits don't like the EU. That table would be ordered rather differently if ranked by net support.
Move aside, my worthy mediterranean gentlemen.
"Sarcastic" Tyler: Do you know why your post rings so true?
"Quantifying The Donors And Moochers... bickering between various 'banana-eating countries' and 'tax cheats'..."
Don't we all have a brother-in-law like that?
In fact my brother-in-law like that had a holiday sweater just like your chart with clashing triangles and a gravy colored back ground. Made you sea sick at Xmas...
If you don't have a brother-in-law like that...
Then you probably ARE the brother-in-law like that…
I enjoy your usual straight forward writing style...
Fortunately the Germans are not so stupid. What do you think the dissolution of the EU would do to their trade surpluses and GDP? They will pay a lot more and still benefit immensely. Grow up, we generally expect more sophistication from ZH. We don't want to have to rename you "Zero Reflection."
SS
The geography needs a bit of correction as the map of Denmark has been switched with Hollands.
But to a more serious point, the complexity of the Eurozone seems hard for Americans to grasp, but lets educate instead of rant.
From a Danish perspective I can say that our subsidy almost entirely goes to a very slumbering farming industry, but consider it a sort of a bribe that keeps France able to have higher artificial prices in place for their farm products, and hence larger Gdp for them.
What goes around comes around, and plenty of taxation on that mill for governments before the expence comes home to roost.
I´am not an expert, but complexity is the name of the game in the EU and never taske aparent face value to quick conclusions.
Just to be clear with the Z.H crowd, I vote no for Dk to join the Euro (union, partnership, fine) common currency and central bank,. hell no!
M. Copenhagen
Interesting detail - the one who put this map together mixed up the maps of Denmark and The Netherlands, in gratitude of their highest contributions per capita.
Interesting chart but these fiscal payments are not the only way to transfer wealth from one region to another - for example Ireland effectively gave up its fishing rights on entering the ECC and now most of the fish caught in Irish waters are made by foreign boats.
Iceland is aware of this of course and its future as a independent fishery is at stake.
Jesus ZH, wake up! Where do you think all that money goes? Right back to Germany!
Athens airport: German company
Greek highways: consortium of German and Greek companies
Rio hanging bridge: consortium of French and Greek companies
biggest political scandal of the last 20 years: Siemens AG (you can imagine they raked in 10x the money they used to bribe the politicians)
Greek navy submarines: built by a German company
Greek army tanks: built by a Germany company
Greek Air Force's next warplane: Eurofigher a strong contender.
so please Germany, spare me the tears
You lost a lot of cred with such a disingenuous conclusion. It's obvious that Germany (which also obviously doesn't mean all, nor most, the Germans) only cares about Germany.
THEY wanted the Euro and THEY wanted the EU (among other things to suck up the Trade suprluses some of the pigs had against them, you know that their consumer demand is nothing to write home about). They got it. Now, they don't want to pick the tab? Fine. Only that no one believes they have the balls.
I recall reading that only a small percentage (in the 15-20% range) of wealthy Greeks pay appropriate income taxes. Why don't members of the EMU address this point? Is it because wealthy Europeans are, like wealthy people elsewhere, adept at storing their wealth in tax-avoidance 'countries' like Switzerland, Lichtenstein, Cayman Islands, etc?
Interesting that Poland and the Netherlands pay in 3 or 4 times what they get out--
Poland puts the P in PPIIGS.
I see a lot more Red than Black. Does this mean a LOT MORE €'s went IN than came OUT?
Where did all those Euros GO? Hmmmm...
Looks like the Netherlands is paying almost 3 times of what they receive, making them the biggest contributor in percentage.
Nice to see that my country has suddenly left the EU... Who the hell made this picture?
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