The rebate distorts UK funding negotiations with the EU. Normally, countries and independent agencies within each country bid to receive central EU funds. The UK government is aware that 2/3 of any EU funding will in effect be deducted from the rebate and come out of UK government funds. Thus the UK has only a 1/3 incentive to apply for EU funds. Other countries, whose contributions into the budget are not affected by funds they receive back, have no incentive to moderate their requests for funds.
This is a perverse effect of the rebate.
On your third point, I wrote wrt the UK:
The sum of the two resources in TOR, agri/sugar levies plus customs duties, (mostly customs duties for the UK), is often close to equalling the VAT (3rd) resource, and is even projected to go beyond it in 2009 (presumably as domestic consumption takes a greater hit from the recession than the UK's trading activities do, even though they diminish). The UK is the second biggest TOR collector in the EU, after Germany and before the Netherlands and Belgium.
Trading economies; big ports. As I suggested, TOR should be considered as EU own resources, as the levies and duties apply to the entire single market, member states simply collecting them on the EU's behalf (and receiving 25% to cover costs).
On the VAT resource, the Treasury document referenced above has an interesting table, (2A p 54), that shows 3rd resource payments by member state for the years 200-8, with projections for 2009. From which it is clear that France is the biggest contributor of this resource, followed by Germany, Italy, and Spain, before the UK.
3. The figures for VAT contributions are after taking account of the UK abatement.
The own resource based on value added tax (VAT) is levied on Member States' VAT bases, which are harmonised for this purpose in accordance with Community rules. The same percentage is levied on the harmonised base of each Member State. However, the VAT base to take into account is capped at 50 % of each Member State's GNI. This rule is intended to avoid that the less prosperous Member States pay out of proportion to their contributive capacity, since consumption and hence VAT tend to account for a higher percentage of a country's national income at relatively lower levels of prosperity.
I agree that the 'traditional own resources' should not be seen so much as a contribution to the EU budget for trading states, but there is a minor argument that the UK is an island which traditionally trades a lot with the world outside of the EU and as a result it does not merely trade on goods to other EU countries, like Belgium and the Netherlands. Still, the resulting 'imbalance' should be negligible.
On your first point, I agree and would additionally note that EU funds generally come with a co-funding requirement that would be relatively high in the UK, so the question isn't merely whether they get a bit less of a grant (because getting 1/3rd of a grant is still free money that should outweigh administrative costs), but rather something that can fundamentally change the calculus of whether a project is worth the cost.
On the second, yes, the VAT resource is capped. It is estimated that the UK gains an advantage from this capping (see the reason given in the EU document you quote), and the first "complication" in the calculation of the UK rebate is to allow for this by subtracting from the initial rebate amount a sum called the "UK advantage".
See this pdf for details.
In the pdf referred to, I would refer you to the table (page 11?) which shows the contributors to the cost of the UK rebate. France 27.37%, Italy 22.47%, Spain 13.99%, Germany 6.22%(?). Schroeder must have been one smart guy with a calculator.
I repeat. There is no logic to the system and looking for it only adds to the illogicalities. Special cases can be made for all Member States. The so-called "Rotterdam effect" in the case of The Netherlands, for instance.
One can look at it from the point of view of the game where one starts building a tower with childrens' blocks but the block marked "UK rebate mechanism" at the base is out of perpendicular. Every additional block is added in one direction or another try and keep the tower stable. But fall it will.
The only rough guiding principle that has emerged is that contributions should be related to wealth. "Each contributes according to capacity and receives according to need". The problem is that there is no agreement on what constitute legitimate needs e.g. the CAP. The results to date have been tailored to (a) trying to meet the GNI criterion and (ii) to the extent that this is not met, making those Member States insisting on an unbalanced view of needs (France for the CAP, Spain and Italy for continued cohesion spending) pick up the tab for the UK rebate.
The issues are political, not budgetary.
