Royal finances, spending and criticism

Let’s face it: royals are not celebrities, although sometimes you really wonder nowadays. Royals mix with celebrities, and have already done so for years. Where celebrities can spend the money they earned as it pleases them, royals have to be much more careful. Already for centuries royal houses have been financed by the state. In the past that has even led to the (almost) bankruptcy of states, because a huge amount of money for example was spent on palaces and art. While celebrities can afford it to show a lavish lifestyle, royals certainly can’t nowadays. Whether they spend private money or money they received from the state, they are closely monitored. Not only do the royals in many monarchies have to open up about their spendings in a yearly report, also the people and the media keep a look at it. The result is that royals are regularly being criticized for their spending, whether they paid for things themselves or it was paid for by wealthy friends.

Financial explanation

Although the financing system is different in each country, in most monarchies royals, or at least the most senior royals, receive an annual allowance from the state – an exception is for example Liechtenstein. Usually this amount of money contains a personal income, but also money is put aside each year to cover personal and material costs like representation, travelling, security, staff payment and palace maintenance. If younger royals don’t receive their own income, their expenses are sometimes covered by more senior royals. This is for example the case in the United Kingdom, where the Queen receives a Sovereign Grant, an annual grant, coming from a percentage of the profits of the Crown Estate revenue. The Prince of Wales receives his income from the private estate, the Duchy of Cornwall. From this money he also supports the working activities of his wife The Duchess of Cornwall, and of his children The Duke and Duchess of Cambridge and The Duke and Duchess of Sussex. Some public money is used if they work in aid of the Queen as Head of State.

Extraordinary spending nowadays is not very welcome, and could even endanger the monarchy. As a royal it is wise to think carefully when spending money or accepting gifts. In several countries like the UK and Spain a yearly list of gifts is being published, containing everything from drawings by children to official gifts received at state visits. In the past official gifts could be very expensive. Royals should always consider whether they should accept a gift or not. Also this is diferent in each country. In the UK for example offering extravagant, valuable gifts at official functions is discourages. One should however remain sensitive to local custom, in the Middle East it is not unusual that royals receive expensive jewelry from their royal hosts.

Expensive samples should be returned if the value is too high, but it is clear that that doesn’t always happen. Many royals happily accept freebies from fashion and jewelry designers. Queen Rania of Jordan for example recently admitted that most of her clothes are either offered as gifts by fashion houses or borrowed, or purchased at reduced special prices. Also other royals get discounts or clothing for free. Queen Letizia of Spain in 2018 was caught wearing a blouse a designer had sent her for free, and it seems Spanish designers often send designs to the palace as gift or for the Queen to see. Princess Marie of Denmark’s newest tiara is not her own, but it was designed by her in collaboration with French jeweler Mauboussin for the French state visit to Denmark. She will be able to wear it in the future also.

Examples of criticism

In 2008 it became known that Prince Willem-Alexander and Princess Máxima of the Netherlands (now King and Queen) were involved in a building project in Mozambique. They wanted to have a holiday house at the peninsula of Machangulo. Their choice was made based on their love for Africa and they hoped to invest in the welfare of the local people. However after reports in the press about corruption and controversial other investors the couple in November 2009 decided to sell the property, due to public and political controversy.

The couple afterwards bought a house at Kranidi, Greece. Although Willem-Alexander privately bought an expensive speedboat to use in Greece, the costs for the private dock at first were being paid for by the state, as it was necessary for the safety of the royal family. After political questions in 2014 the King had to pay for it himself. Also the security fence costs were a reason for politicians to complain. Dutch royal boats and yachts have been an issue anyway. For her 18th birthday Queen Beatrix of the Netherlands received a yacht as state gift, De Groene Draeck. She still uses it, but the maintenance at the shipyard of the royal navy has always been paid for by the state, and in more recent years the costs have gone up considerably.

Crown Prince Haakon and Crown Princess Mette-Marit of Norway in the Summer of 2015 were heavily criticized after a holiday for a few days on a very expensive superyacht, on the invitation of a friend. Haakon didn’t want to reveal the name of the friend, but said he as far as he knew didn’t have any special interests in Norway. The huge fuel comsumption of the yacht was also regarded as contradictory with the focus of the couple on environmental issues. It also remains unclear who paid for the trip.

Last week The Duchess of Sussex travelled to New York for her baby shower, organised and being paid for by (celebrity) friends. Although she didn’t have to pay for this private event herself, and even used the private jet of a friend, there was criticism. The event was being held in the penthouse of one of the most expensive hotels of New York and must have cost something. It was probably not the best place to hold the baby shower, as in a much more private place probably nobody would have noticed it ever had taken place. Now it leaked that it was taking place it turned a bit into a media circus, which it shouldn’t have been.

Security costs have never been so high. Royals have always been a target, but with the terrorist threats since 2001 they only have become higher. The main royals need bodyguards, their houses have to be protected. Costs of royal weddings, the maintenance of palaces and royal travelling have also been an issue for long. Touring abroad can be terribly expensive. For transport most royal families use airplanes and helicopters from the air force or the government jet of their country. In some countries even private charters are being paid for by the state. If possible royals nowadays take regular flights, but that’s not always the case. Several royal families like the ones from the Netherlands and the UK also have private trains. Also travelling costs within the country can be high, and in the UK it is often questioned why royals take helicopters to their engagements instead of a car.

Are republics less expensive?

I am not sure which Swedish king it was (I am sure one of my readers does know), but one of them once said in the 20th century, that he would be willing to abdicate if republicans could actually prove that a monarchy would be more expensive than a republic. Needless to say, that never happened.

Transparency of costs is given more and more in recent years, which is good as there are many myths about the costs of the monarchy. To many people it seems to be quite unclear how the royals are being financed and who receives money from the state, and who has to earn his/her own money, which leads to criticism. Looking at my own country the ones receiving an apanage are the King, Queen and Princess Beatrix (as former monarch) at the moment, and as soon as she is 18 years old also the heir to the throne, Princess Amalia receives her own income. The other members of the family however have normal jobs, although many people, including some politicians, believe that they all receive money.

Heads of state in republics are much more often being replaced. Royals are often a force of stability and in most countries don’t have much political power anymore. I don’t think either palaces will be demolished after the end of a monarchy. They will still need maintenance. And how often presidents have their seat in former royal palaces, or even build their own. Also presidents need security and have travelling costs, and sometimes have extravagant lifestyles – just remember Silvio Berlusconi in Italy or Nicolas Sarkozy in France. Palaces attract visitors from abroad, and after royal weddings often more foreign visitors flock to the country where that wedding was being held, thus being good for the economy.

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