This article is accurate for the latest versions of EU3, Napoleon’s Ambition, In Nomine, Heir to the Throne and Divine Wind.
The Economy is managed through the Domestic Economy tab, found on the third tab of the Domestic Management interface. The economic system in EU3 is fairly complicated with two distinct systems that have multiple layers of depth. The layout of the game interface is in some ways contradictory as to how the economic system actually works, and the economic model is not necessarily logical. The purpose of this page is to provide a reference guide detailing how the economy works, with links to pages that describe the various economic subsystems in greater depth. For advice on how to run an economy, see the Economic strategy guide.
In essence, the game has two distinct economic systems:
- Monthly Income & Investments: These could be referred to as the "National economy"
- Annual Income & Fixed Expenses: These could be referred to as the "Government budget"
Annual income and fixed expenses directly interact with a nation's treasury. While annual income adds to the treasury once a year, fixed expenses are deducted from the treasury every month. This leads some to incorrectly confuse fixed expenses with monthly income. Monthly income is instead "spent" on investments (research, stability, or minting). In order to make sense of these two economic systems, some players suggest that monthly income and investments reflect the national economy; e.g. the economic activity of citizens. Meanwhile, annual income and fixed expenses reflect the government budget.
- Main article: Taxes
Taxes have the following main components:
- Taxation: Based on each province owned, primarily determined by population size. The more provinces and population a nation has, the more census taxes it collects.
- Harbor Fees or Trade Tariffs: Generated by the Center of Trades a nation owns. Every merchant that operates in a CoT pays a fixed rate of 3 ducats per year to the nation owning that CoT.
- Tolls or Trade Tax: Generated by every province based on the population and the Trade Efficiency of the nation.
- Looting of enemy provinces: When an army lands on an enemy province that is not already looted, the owner of the army gets an amount of ducats equal to the base tax value of the province. This is added to that month's Taxation.
- Main article: Production
Production is generated by each province a nation owns based on the good that province produces. Production is affected by the following factors:
- Unit price of the good: Determined by the supply and demand for that good.
- Amount of good produced: Determined by the population in provinces that have particular goods. In IN the base_tax of provinces also has an effect.
- Production Efficiency: Determined by technology level and other modifiers.
- Main article: Trade
Trade is generated by a nation's merchants who operate at a Center of Trade (CoT). Trade is affected by the following factors:
- Center of Trade: The mechanism through which all trading occurs in the game.
- Merchant placement and compete chance: The ability of a nations merchants to succeed in a CoT.
- Trade efficiency: Determined by technology level and other modifiers.
Gold: Generated by every province that has resource type gold. The amount generated depends on the mine itself and the population of the province. Unlike all other trade goods, gold does not have any unit values for production, nor does gold get traded into a CoT. Gold goes directly into the monthly income, and only causes inflation if it accounts for 40% of monthly income.
- Overseas Tariffs: (IN, HTTT, DW). Any cities or colonies on a different continent are considered Distant Overseas and do not produce tax but instead provide a Tariff. This value is modified by the National Idea Viceroys and by the number of Big ships and Light ships.
Other Forms of Income
There are several other forms of income, all indicated on "Income Overview" in the ledger:
- Events: Random game events that happened during the month and provide ducats .
- Manufactories: Every manufactory built provides 6 or 12 ducats per year. This is divided in 12 monthly payments.
- Peace: Any money earned from a peace negotiation during the month.
- Subsidies: (listed below expenses), When you receive War Subsidies from another country, usually to help you out in a war.
- Tribute: (listed below expenses), When you are either paying or receiving a tribute from a Steppe Horde.
- Harbour fees: 3 per merchant (of any nation) in owned Centre of Trade
Investments in technology can serve three purposes:
- Production/Trade: Advance a nation's income generating capability (and thus increase ability to fund even more investments)
- Land/Naval: Advance a nation's ability to wage war
- Government: Advance a nation's ability to change governments and achieve new national ideas.
Investments in stability are essentially a way of keeping the masses happy, as well as an immediate benefit to your economy.
Minting is a process of creating new currency to supplement the annual income. The ducats are added to the treasury, but the downside is that minting increases inflation.
Annual expenses can only be found in the "annual expense" page in the game ledger. These expenses include province improvements, recruiting and maintaining armies and navies, and paying for sending agents.
Annual income (a.k.a. the census tax, tithe, or direct tax) is the primary source of money used for both fixed expenses and annual expenses. Annual income is the income in ducats added directly to the treasury on January 1 each year. This can only be seen by doing a mouse-over on the treasury and in the ledger, where it is reported as Census Taxes. This concept is analyzed in more detail in the Taxes article.
Other sources of income can also contribute to the annual income: minting, interest income from loans, loan income, and selling provinces to other countries.
Annual Balance = Census Taxes + Sum(Monthly minting) + Loans to other nations + Provinces sold - Sum(Monthly expenses) +/- Peace resolutions +/- Events
Any nation can take a loan (using the take loan button) if it runs out of cash, with the loan amount added directly into the treasury (e.g. part of annual income for that year). The loan period is always 5 years, at which point reimbursement will be due. Loans cannot be paid early. Interest fees depend on national stability, and banker advisors. The base rate is 5% for the first loan, and each subsequent loan will increase by 2%. Loans that cannot be repaid after 5 years will renew with an interest rate increase of 3%.
It seems that in In Nomine is a bit different, no matter how much modifiers (banker advisors and stability) you have, the minimum interest rate is 1%, and subsequent loans don't increase the interest rate.
A country with negative assets that is unable to take any more loans will go bankrupt. This has the following immediate effects:
- -3 stability.
- -100 prestige.
- All current loans are eliminated, as is the balance of whatever amount owed that forced the bankruptcy.
- Inflation is reduced by 50%, unless the country is already affected by the Bankruptcy modifier.
- Any advisors currently serving will depart since they are not paid.
- Any mercenaries that are currently part of the military will immediately leave. This will happen even if they are in the midst of combat.
In addition, the country gains the 'Bankruptcy' modifier for the next 10 years, giving:
- All armies and navies will have -2.0 morale, making them very easily routed. This also affects garrisons.
- +1% revolt risk in every province.
- Any new loans incur an additional 10% interest rate charge over and above their usual interest rates.
- Merchants, colonists and missionaries cost 50% more.
- Land and naval maintenance costs are reduced by 20%.