Economy

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Economy interface

Economics in EU4 revolves around the earning and expenditure of Gold Icon.pngducats, the game's international currency. The national and international economy underpin almost every function of a country, and often fuels international diplomacy. Understanding and developing a country's economy yields better national finances, allowing the country to boost its standing in the world and further grow at a faster pace.

The Economy panel in the Country interface displays a summary of the player's finances and provides a few important actions relating to it (such as Loans and Reduce Inflation).

Overview[edit]

The total amount of Gold Icon.png ducats in a country's treasury is updated at the beginning of every month. The amount by which this changes is the total Income.png income minus the Expenses.png expenditure for the previous month. The various factors which affect these amounts are listed below. In addition, various Msg event.pngevents may add or take away from the treasury.

Aside from the continuing incomes and expenses mentioned below, Gold Icon.png ducats may also be gained or spent as one-time earnings or payments in the following ways:

Earnings:

  • Treasure fleets
  • Estate interactions
  • Receiving gifts and loans from other countries through Diplomatic power.pngdiplomacy
  • Siphon income from a junior partner in a personal union

Expenditures:

  • Constructing buildings
  • Estate interactions
  • Hiring costs for Advisor.pngadvisors
  • Recruitment costs for Infantry.pngland and Bigship.pngnaval units
  • Providing gifts and loans to other countries through Diplomatic power.pngdiplomacy
  • Supporting rebels in another country through espionage

Income[edit]

The "Income" column lists regular streams of income, and effect by modifiers plus efficiency (in grey, middle column).

Income.pngIncome is the sum of all money gained monthly. Unlike in EU3, all income is liquid and does not need to be minted. The continuous sources of income that a country has is listed in the "Income" column, which is on the left side of the Economy panel (see right). This panel lists both the total amount from each source and that source's bonus (if any). Hovering over the source or bonus shows a tooltip with detailed information, such as modifiers or a breakdown of income by province.

The maximum amount of Gold Icon.pngducats a country can have in its treasury is 1 million. However, this number is considered to be difficult to reach without using console commands or mods.

Taxation[edit]

Main article: Tax

Tax income.pngTax comes directly from the population of a province, and produces a relatively dependable baseline income. Each province has a Tax Base Icon.pngbase tax (which may be increased by spending Administrative power.png administrative power), and a Local tax modifier.pngtax income efficiency. The yearly province tax amount is the multiple of the two amounts. There is also a National tax modifier.pngNational Tax Income, that is calculated at a countrywide level. Various tax modifiers exist that may change this amount.

Production[edit]

Main article: Production

Production.pngProduction is a measure of the amount of income generated in a province by local producers of its trade good. Unlike in EU3, production income is added directly to the state's income each month. This amount depends on the good's prices, the province's base production, and the Production efficiency.pngproduction efficiency (among other modifiers).

Trade[edit]

Main article: Trade

The Trade value.pngtrade value produced by each province flows into the trade network, where it is eventually collected by capitals and Merchants.pngmerchants and converted into Gold Icon.pngducats. Careful management of trade can make it the most powerful source of income by far.

Gold[edit]

GoldGold is a special "trade" good. Gold does not produce any Trade value.pngtrade value; instead, it is converted directly into ducats. Gold production income is equal to 40 Gold Icon.pngducats per year per unit produced, with the exception of pagan countries which receive income equal to only 1 Gold Icon.pngducat per year per unit produced. Income from gold causes Inflation reduction.pnginflation per year equal to half its proportion of the country's income; at 100% income the country's inflation would increase by 0.50% per year.

With the El Dorado.pngEl Dorado expansion enabled, Subject colony icon.pngcolonial nations with gold provinces will not receive the income of gold for themselves, but instead will store it in a ‘Treasure Fleet Counter’ that counts up towards a certain sum depending on the size of the colony’s gold mines. Once the counter is full, the colony will send a treasure fleet. The treasure fleet travels downstream along the trade routes, passing each node between the colonial nation and its overlord's trade capital. If there are privateers present in these nodes, they will steal a share of the gold corresponding to their power in the node. At the end of the journey, any money that remains is given to the overlord nation, which will suffer Inflation reduction.pnginflation similar to that gained from gold mines.

Nations who do not have their trade capital downstream of their colonies’ trade nodes will be unable to receive treasure fleets. In these cases, the colonial nation will simply keep the gold for themselves, paying just the usual amount in tariffs.

Tariffs[edit]

Main article: Tariffs

Subject colony icon.pngColonial nations are required to transfer a part of their total income, called Global tariffs.pngtariffs, to their overlord. At their formation, this amount is 10% of their income. The tariffs can be set for each colonial nation by the overlord in the Subjects interface or may change through Msg event.pngevents. Higher tariffs increase the level of Liberty desire in the colonial nation.

Vassals[edit]

Main article: Income from vassals

Vassal.pngVassals are required to pay a Income from vassals.pngfee to their overlords. The basis for calculating this fee is the Tax income.pngtax income of the vassal. The amount that must be paid is modified by the ‘vassals tax efficiency’ of the overlord, which is influenced by the overlord's Legitimacy.pnglegitimacy, among other factors.

Harbor fees[edit]

Signing a fleet basing agreement with another country will cost an amount equal to 0.1Gold Icon.pngducats[1] per month for every port belonging to the other country with a minimum of 0.5Gold Icon.pngducats and maximum of 2.0Gold Icon.pngducats per month.

The AI never asks to access ports of the player, and the player can never offer it (there is a -1000 "strategic interests" modifier). Whether the province is cored or not has no effect on the cost of fleet basing rights.

Subsidies[edit]

Main article: Diplomacy#Give_subsidies

Countries that have a strategic interest in another country may grant subsidies to that country, which is given in the form of a certain amount of the benefactor's Income.png monthly income each month for a certain number of years.

Spoils of war[edit]

The Spoils of War section includes income gained from military and wartime actions. This includes:

  • Looting: Looting occurs when a province (either occupied or besieged) has hostile units stationed in it. Each province has a loot bar that depletes based on the amount that the army can loot every month.
  • Privateering: A country can send their Lightship.png light ships on missions to Privateer in certain sea zones, aiding pirate nations in exchange for a portion of their earnings.

War Reparations[edit]

If the Art of War.pngArt of War DLC is enabled, a country has the option to demand 10% of an enemy's income for 10 years as part of a peace deal.

Condottieri[edit]

If the Mare Nostrum.png Mare Nostrum DLC is enabled, it is possible to offer a country Condottieri, which are armies rented out for money.

Expenses[edit]

The "Expenses" column showing major payments and maintenances.

A country's Expenses.pngexpenses, i.e., its monthly continuous payments, is similarly listed in the Expenses column on the right side of the Economy panel. This column lists two types of expenses:

  • Automatic expenses: These are expenses which are automatically deducted from the treasury. They cannot be modified from the Economy panel, simply viewed (except for Interest per annum.pngInterest, which may be changed through the Loans interface).
  • Adjustable expenses: These expenses are shown with sliders, to adjust the amount being spent monthly on them. Changing these expenses using the sliders will have an impact on the action being done or the asset being maintained.

Advisors[edit]

Main article: Advisor cost

Advisor.pngAdvisors have a base monthly salary equal to the square of their skill level, increased by 0.5% per game year since 1444. Hovering over this in the Expenses column shows a tooltip that lists other modifiers, including Inflation.

State maintenance[edit]

Main article: State maintenance

Number of states.pngStates require continuous monetary upkeep, depending on the development of the provinces, the distance to the capital and further modifiers.

Interest[edit]

Main article: Loans

Interest per annum.pngInterest must be paid on loans. The default interest rate is 4%, which may be changed by modifiers. Further information is given in the Loans section below.

Diplomatic expenses[edit]

Diplomatic expenses.

Hovering over Diplomatic Expenses shows a tooltip with a more detailed breakdown of a country's diplomatic expenses (see right). These are as follows:

  • Subsidies: Gold Icon.pngDucats sent monthly to other countries as subsidies, if any.
  • Vassal fee: If the country is a Vassal.pngvassal, the amount of Income from vassals.pngvassal fees sent to their overlord.
  • Outgoing tariffs: If the country is a Subject colony icon.pngcolonial nation, the amount of Gold Icon.pngducats paid to their overlord as Global tariffs.pngtariffs.
  • War Reparations: Amount paid to winners of previous wars (usually 10% of income for 10 years). See war reparations for more details (Requires Art of War.pngArt of War DLC).
  • Support Loyalists: Amount spent to junior partners in Personal union.pngPersonal unions to reduce their Liberty desire.pngLiberty desire.
  • Send Officers: Amount sent to Icon protectorate.pngprotectorates to reduce their Liberty desire and provide a bonus to their armies.
  • Condottieri fees: Amount paid to other countries as rent for Condottieri (requires Mare Nostrum.pngMare Nostrum DLC).

Fort maintenance[edit]

Main article: Forts

This shows the amount spent monthly to maintain the Fort level.pngforts present in a country. The amount spent on each fort depends on its fort level. Forts can be mothballed while at peace to reduce their Fort maintenance.pngmaintenance by a -50% modifier. Doing so will inhibits the forts upkeep of Army tradition.pngarmy tradition and remove the defenders making it easy to conquer in a war.

Colonial maintenance[edit]

Main article: Colonial maintenance

Colonies require a monthly maintainenance while they grow until they become full cities. The cost per year is:

So, the cost per month is roughly:

Thus, a 5 {icon|development}}development province will cost about 2.10 Gold Icon.pngducats per month to colonize, while a 6 development province will cost 2.12Gold Icon.pngducats per month. The cost is further increased quadratically for each colony over the number of Colonists.pngcolonists the country has. Colonial maintenance can be reduced, but at the cost of colonial growth. Provincial modifiers to colony growth are applied separately to this change. So, a tropical colony will shrink by -110 settlers with zero maintenance due to the additional -10 settlers provincial modifier. Colonial maintenance also does not affect growth from colonist agents.

Colonists.pngColonists cannot be sent while a country is bankrupt.

Missionary maintenance[edit]

Main article: Missionary maintenance

At the 1444 start, each active Missionaries.pngmissionary costs 5Gold Icon.pngducats per year at full funding. This base value changes over the years. Reducing missionary maintenance reduces Missionary strength.pngmissionary strength.

Root out corruption[edit]

Main article: Corruption

A country can lower Corruption.pngcorruption by spending up to 0.05Gold Icon.pngducats per effective Development.pngdevelopment per month under the Root Out Corruption slider, for a maximum of -1% every year. Effective development is affected by Autonomy.pngautonomy. The total cost of rooting out corruption is calculated using the formula:

where effective development is determined by the formula:

  • Corruption cost multiplier is the amount spent per effective development. This is the amount that is controlled by the slider. It can be changed from 0Gold Icon.pngducats per month to 0.05Gold Icon.pngducats per month.
  • Local autonomy is used in decimal form in the above calculations.

Example[edit]

Total province development and local autonomy for each of the three provinces for Andhra

For the three-province country Andhra (see right), the maximum cost to root out corruption can be calculated as follows:

  • Total national development
  • Sum of effective development changes by each province:
  • Kosta:
  • Velanadu:
  • Konaseema:

So, the final cost will be:

The calculations above mean that higher Autonomy.pnglocal autonomy will decrease the cost of lowering corruption.

Army maintenance[edit]

Main article: Army maintenance

At full Land maintenance modifier.pngarmy maintenance, each fielded regiment has a monthly maintenance cost equal to 2% of its Regiment cost.pngrecruitment price. All modifiers to maintenance are added together and applied to this. Reducing army maintenance using the slider affects Reinforce speed.pngreinforcement rates and Morale of armies.pngmorale, to 0% reinforcement rate and a -100% modifier to morale at minimal funding. Condottieri reinforcements and maintenance costs are applied even when maintenance slider is at zero.

Maintenance costs increase over time as a country advances in Technology.pngtechnology.

Maintenance costs will reduce when a regiment suffers casualties, but will increase due to an added cost for reinforcement. Maintenance costs will also increase when a country exceeds its Land forcelimit.pngforce limit.

Fleet maintenance[edit]

Main article: Navy maintenance

Naval maintenance modifier.pngFleet maintenance works the same as army maintenance but with certain exceptions:

  • First, naval maintenance increases at discrete steps rather than continuously. It is increased by 10% at Diplomatic tech.pngDiplomatic technology levels 3, 5, 9, 15, 19, 22, 25, 27, 29, and 31 (to a total of +100%).
  • Third, vessels do not cost increased maintenance to Global ship repair.pngrepair, but also do not cost reduced maintenance if damaged.

Further differences, including those on how modifiers are applied, are listed on the Navy page.

If the Art of War.pngArt of War DLC is enabled, mothballing allows naval units to be left unusable in a country's docks for lower maintenance, while giving ships 5% hull damage per year of being mothballed.

Loans[edit]

Bank loans[edit]

Taking a loan grants an amount of money equal to result of following formulae:

Acquiring the National Bank idea in Economic Idea Group can trigger an event in which loans can be changed to grant money equal to 6 or 24 months' income.

A loan may be taken at any time, although each loan taken increases inflation by 0.1[1]. A loan may be paid back in full, plus the total remaining interest owed, at any time during the loan period. If a loan expires and the borrower cannot (or chooses not to) pay the principal, the loan will be extended for an additional 5 years at the current interest rate, and inflation will increase by an additional 0.1.

Interest[edit]

Loans have a default interest rate of 4% per year[1], paid monthly. The interest rate is influenced by:

Interest per annum.png Conditions
−2.00 as optional difficulty bonus (for the player (easy, very easy) or the AI (hard, very hard))
−1.00 as lucky nation (AI only)
−1.00 with Ganga.png Ganga as personal deity (for Hinduism Hindu nations)
−1.00 during Parliament.png parliament issue “Contribute to Government Debt Payment”
−0.02 for every percentage point of Revanchism icon.pngrevanchism
+1.00 per point of negative Icon stability.pngstability
+10.00 if bankrupt

Ideas and policies

Interest per annum.png Traditions Ideas Bonuses Policies
−1.0
  • Genoese traditions
  • Administrative idea 4: Bookkeeping
  • Economic idea 4: Debt and Loans
  • Austrian idea 3: Fugger Banking
  • Gutnish idea 7: Found Visby Bank
  • Hamburger idea 6: Berenberg Bank
  • Hanseatic idea 7: The Hansa Bank
  • Tuscan idea 3: Tuscan Banking
  • Innovative-Trade: The Banking System

Various events and decisions.

The minimum interest rate that has to be paid is 0.25%.[1]

Loans from countries[edit]

Countries that have a strategic interest in another country's wars may grant loans to that country. With Rights of Man active, rulers with the Indulgent trait will accept loans from Human Players if needed.

Interest[edit]

The interest rate of loans from countries is set by the country granting the loan.

CB for cancelling loan[edit]

If the borrower refuse to pay the principal when a loan expires, the lender gets a 12-month CB "Cancelled Loan" against the borrower.

Debase currency[edit]

Debasing currency is a feature added in 1.18's Rights of Man, it gives the player a loan's amount of money at the cost of 2 Corruption.png corruption. This is useful if the player wants to repay it over time at their pace (Not receiving even more inflation for re-newing loans); however, it is a lot more costly than a regular loan, costing around 60% of its value to be repaid back, plus the negative modifiers for having corruption, but the value to root it back can be reduced significantly if the player is ahead of time on diplomatic and/or administrative technology, and if its ruler has the incorruptible trait; giving a "negative" interest if the player is willing to wait for it to decay naturally, with the only penalty the positive corruption effects. Cannot be used if corruption is at 90.

Bankruptcy[edit]

If the combined monthly interest of loans exceeds a country's monthly income, the country will be forced to declare bankruptcy.

Bankruptcy gives a number of negative effects for 10 years:[2]

National unrest.png +3 National unrest
Interest per annum.png +10% Interest per annum
Morale of armies.png −100% Morale of armies
Morale of navies.png −100% Morale of navies
Reinforce speed.png −25% Reinforcement speed
Bureaucrats faction influence +0.25 Bureaucrats faction influence
Guilds influence +0.25 The guilds influence
Manpower recovery speed.png −100% Manpower recovery speed
Sailor recovery speed.png −100% Sailor recovery speed
Advisor cost.png +100% Advisor cost
Monthly fervor increase.png −2 Monthly fervor
Global settler increase.png −200 Global settler increase
Autonomy.png +0.20 Monthly autonomy change
Institution spread.png −20% Institution spread
Militarization of state.png −0.25 Militarization of state

Entering bankruptcy also removes 25% of your current inflation, reduces stability by 3, reduces legitimacy or republican tradition to 0, and reduces all monarch power to 0. All of your mercenaries, advisors and loans are also dismissed.

Inflation[edit]

In economics, inflation is an increase in the price of goods over time. In gameplay terms, inflation makes all expenses cost more. Low levels of inflation (around 10%), though not ideal, are reasonable. Around 20% or higher, this could signify an economic catastrophe, and measures must be taken to avoid total collapse. However, as soon as inflation is 5+% its possible to get bad events because of the high inflation incuring stab hits or increased local autonomy.

Contrary to real life, inflation in game does not mean constantly increasing prices, but rather a flat increase of the country's expenses. In real life certain incomes would increase with inflation as well. This reflects that the in game "ducats" have a constant value over the course of centuries and serve as an absolute indicator of value. In the real history the value of gold was just as volatile as anything else. The in-game inflation simply represents the inflation over the time between collecting income and spending it, therefore representing that the income has lost value while it was sitting in the country's treasury.

Gaining inflation[edit]

Inflation is increased by the following:

  • Each loan taken or extended increases inflation by +0.10.
  • Income from gold increases inflation by 0.50 per year times the proportion of income from gold.
  • Lump sums of monetary compensation claimed in a peace treaty (but not reparations) cause a one-time increase of inflation.
  • Selling provinces to other nations
  • Receiving gifts from other nations
  • (El Dorado.png El Dorado DLC) Receiving or plundering treasure fleets
  • Various events can increase inflation.

These are all situations where the country's money supply is expanded. In economics, an expansion in the supply of money without corresponding economic growth causes a decrease in its value, i.e. inflation. Before the middle of the 20th century, and certainly during the period of EU4, currency was only considered money to the extent that it was either made of or backed by gold (and silver, which is represented by gold in the game), which is why gold income (a direct injection of pure money) causes inflation.

Reducing inflation[edit]

Passive[edit]

Several effects reduce inflation over time.

  • The Master of Mint advisor reduces inflation by -0.10 per year.
  • Economics Idea group third idea National bank gives yearly inflation reduction by +0.10 per year.
  • Various events, decisions, triggered modifiers, and mission rewards can reduce inflation.
Inflation reduction.png Traditions Ideas Bonuses Policies
+0.10 yearly
  • Mexican traditions
  • Mutapan traditions
  • Economic idea 3: National Bank
  • Andean idea 3: Tears of the Sun
  • Brazilian idea 3: Mines of Minas Gerais
  • Butua idea 2: Strict Gold Trade Regulations
  • Dutch idea 1: Found the Amsterdam Wisselbank
  • Malvi idea 6: Jain Bankers
  • Slovak idea 3: Golden Kremnica
+0.05 yearly
  • Austrian idea 3: Fugger Banking

Active[edit]

If passive means are unavailable or insufficient, the Reduce Inflation button in the budget panel reduces inflation by -2.00 in exchange for -75 Administrative Power.

Reduce inflation cost.png Traditions Ideas Bonuses Policies
−10%
  • Innovative idea 5: Resilient State
. The Innovation idea groups "Resilient state" reduces the MP cost with 10%.

War taxes[edit]

Counter-intuitively, war taxes do not increase tax income. They instead decrease maintenance and increase available mercenaries for 2 years[1] at the cost of 50 Military power.png military power[1]. This bonus will end as soon as the nation is at peace. The bonus given are:

Land maintenance modifier.png −20% Land maintenance modifier
Naval maintenance modifier.png −20% Naval maintenance modifier
Available mercenaries.png +5% Available Mercenaries

Footnotes[edit]

  1. 1.0 1.1 1.2 1.3 1.4 1.5 See in /Europa Universalis IV/common/defines.lua.
  2. See in /Europa Universalis IV/common/static_modifiers/00_static_modifiers.txt (Static modifiers#Bankruptcy).
Economy
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