The European Union budget funds the policies and the expenditures of all the EU Institutions. The budget is negotiated between the European Parliament and the Council of Ministers on a basis of a proposal by the Commission.
For 2007, the EU budget runs to about €126 billion. This corresponds to only around € 0.70/day per person. The money comes from four different sources:
What does the money get spent on?
According to opinion polls, a quarter of the public (wrongly) believes that the greatest part of the EU budget is spent on administration. In fact, the administrative expenses of the Union will total 6.9 billion euro in 2007, less than 6% of EU spending. The European Commission uses less than a half of this (3,3 billion €); the rest covers the cost of running the other EU institutions, for example the European Parliament.
So where does the rest of the money go?
Mostly back to Member States, in the following ways: