Like everything in the European Parliament, the manner in which money is distributed to its members is extremely complicated. It's all split up into various funds, each with its own purpose and rules. Even this clarification is not very, um, clear. But if you are interested in learning how much a Member of the European Parliament (MEP) can earn or spend, this is probably the most straightforward explanation that you can find on the internet. Click on the individual boxes to learn more about each fund.
This overview is of course not fully comprehensive. MEPs enjoy a number of other privileges, which you can read about here.
And let me give some credit to the EU: the simple fact that this information was made publicly accessible at all is a positive thing. This is better than what you'd find, let's say, in a monarchy.
Do I spend it all?
The amount indicated for the different allowances is the maximum that I am able to use (or claim, in the case of daily allowance). It isn’t easy to spend such large, specific amounts of money. You have to be very motivated to find €4,563 worth of office goods to purchase every month, for instance. And on top of that there are many rules that make things even more complicated. I can only hire four accredited parliamentary assistants with the money I can spend on staff, to name one example.
It is also possible to carry the funds over in some cases. So if I have no good reason to spend all the money one month, it makes sense to save it in case I will need it the next month.
This money is used to pay the people who do all of the work, the MEP's employees. They earn much less than a MEP, because they are too busy to spend that much money anyways. In order to ensure that the MEPs don't try to stick this money in their pockets too, the employees are paid directly by the Parliament.
MEPs can also use this fund to pay external service providers (usually companies contracted to help carry out certain projects).
How this could be problematic:
It's not very problematic, actually. The use of this money is supervised by the Parliament. And it makes perfect sense that MEPs have the money to hire qualified assistants and service providers in order to effectively carry out their work.
Once elected, MEPs are not asked to move to the Parliament's official seat (especially since there are more than one...). This means that whenever they are in Brussels or Strasbourg they are officially on travel. The allowance serves then to cover the expenses of meals, accommodation and other incidental costs.
How this could be problematic:
It's just too much. It's a good idea to have an allowance for the travel costs of a mobile job. But nobody needs that much money. It should be half that amount.
In order to incentivize MEPs to come to work, they have to sign a presence sheet in Parliament to claim the allowance. And whoever shows up than less than half the time gets only half their allowance. This is kind of smart. But it is mostly sad: public representatives must be lured with extra money to show up to work. Some MEPs (Nicola Beer) even demanded their allowance while under work-from-home orders…
Once upon a time, if you said to somebody on the street: "EPP, ECR, GUE/NGL, S&D, ALDE, Verts/EFA," they would think you're suffering a stroke. The European Parliament realized it needed a little publicity to make people aware of what was actually going on there. Therefore it created the Budget-400 fund, which MEPs could spend on things that made people aware of the existence of their political groups (this explains why you'll sometimes see the logo of the Green group on Nico's stuff).
Has it worked? Well, the number of internet searches for "EPP" has changed exactly zero percent in the last 15 years, so interest in European political groups doesn't seem to be growing. But at least Nico got to use some of the money to produce condoms, so score one for safe sex!
MEPs can use the official €4,563 per month to cover the operating costs of their office - we saw that the amount of money we get differs every month and we yet haven't figured out why. This can include, to name just the most typical examples: printer paper, rent for a constituency office, and lobster costumes.
How this could be problematic:
The money gets sent to a bank account set up especially for this purpose by the MEP. Only he or she must have access to it.
MEPs are not required to submit any receipts or records of their use of this allowance. They are only asked to keep this information "on hand." This will be examined only if there is reason to suspect that the MEP is misusing the funds. What exactly this means is unclear. In practice there is no oversight. MEPs can do with the money what they wish. It's even referred to within the parliament as a "shadow salary." There is the possibility for a members to hand back the money that they didn't use at the end of the term. Some actually do this, but most don't.
A selfish MEP can pocket over €270,000 by the end of a five-year legislative term. Tax-free and fully legal.
This amount applies to MEPs who pay taxes in Germany. Other MEPs receive a different amount depending on their country's tax system.
We live in a money-based economy. Even those who entered politics to bring down capitalism have to pay their phone bill. The salary needs to be high enough to make it attractive to assume the office and carry it out without relying on other sources of income.
How this can be problematic:
The amount is certainly far more than what is necessary to make a living solely as an MEP. And even then, many MEPs continue to make extra money on the side.
How much should a MEP earn? This is a complicated question that only society can answer based on what it values (though of course society had very little say in setting the salary of MEPs, which is set at 38.5% of the basic salary of judges at the EU Court of Justice). Should MEPs earn more than CEOs, because they do more for the common good? Or should MEPs earn very little, so they are only motivated by non-financial reasons to hold office? But wouldn’t that mean that only rich people who don't need the money would take the job? Etc. etc.
In any case, there are now basically only rich people in the Parliament.