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The economy in EU2 is a process in which a country generates diverse streams of income, collects them, and channels them into technology, stability, and its treasury. This page gives an overview of how it works. For details, see linked articles.

Each country has its own technology levels in each of four areas: land tech, naval tech, trade tech, and infrastructure. It also has technology "accounts" for all four techs, representing progress towards the next level. Similarly each country has its own stability level, and stability "account" for that. And it has its own treasury. These are the six possible destinations to which income may be voluntary directed, on the budget screen.

This is the process that EU2 performs on each month end:

  1. Income generation: If it is Jan 1, the census tax is generated and added directly into treasury. All other income is generated at the end of each month, from many sources. See the separate article on income.
  2. Collection: All income in a month is consolidated into a single amount, a number (of ducats). (All income streams, accounts, etc. are denominated in ducats.)
  3. High priority spending: At this point, the two kinds of high priority spending are made. These are military maintenance, and interest on loans. Spending for these items is subtracted from the treasury. If there is not enough in treasury to pay these outlays, then the treasury is set to zero and the balance is subtracted directly from income. If there is not enough income, then it is set to zero, and the country suffers bankruptcy.
  4. Voluntary spending: At this point, the remaining income is divided according to the country's spending sliders, and added to accounts for technology, stability, or minted to the treasury. In addition, several kinds of direct investment are added directly to specific accounts (tech or stability).
  5. Levelling: If the amount in an account has reached the amount N needed for the next level, then two things happen:
    1. The country's tech level in that technology, or its stability level, is incremented. You will get a message when this happens to your country.
    2. The account has N ducats subtracted from it, and a new N is computed (see the articles on technology and stability for how technology costs and stability costs are computed).