Rebates: correction mechanisms

EU Member States’ contributions to the EU budget are calculated based on their relative economic strength, as measured by their Gross National Income (GNI).

At the Fontainebleau European Council in France in 1984, it was decided by the then 10 Member States (Germany, Belgium, Denmark, France, Greece, Ireland, Italy, Luxembourg, the Netherlands and the UK) to grant the UK a rebate to reduce its contribution to the EU budget. Since then, some other Member States felt that they were also paying too much towards the EU budget, even if based on objective economic criteria. Measures were taken to correct (compensate) also financial contributions for Denmark, Germany, the Netherlands, Austria and Sweden. Similar corrections continue for these countries for the period 2021-2027.

In 2014, a high-level group on Own Resources was established to examine how the system of financing the EU budget could be made fairer, simpler, more transparent and democratically accountable. In line with the high-level group’s final report and recommendations titled the “Future Financing of the EU”, the Commission proposed to gradually eliminate all corrections on the revenue side, as part of a fair and balanced budget.

However, in the Special European Council of July 2020, the Member States agreed to keep these rebates. For the period 2021-2027, lump-sum corrections will reduce the annual GNI-based contribution of Denmark, the Netherlands, Austria, Sweden, and Germany. The gross reductions will be financed by all other Member States, according to their GNI, and correspond to (in 2020 prices):

Rebates per year: