Simply put, economy is a matter of income & expenses: What you get, how you spend it and what you choose to invest it in.
In Europa Universalis IV, your “Treasury” shows how much money you have to spend, and, if you're lucky, any surplus you have left over. This week we´ll talk about your country’s basic economy and then we will go into detail how the economy has changed in Europa Universalis IV. Like many of the systems, we have overhauled national economies so they are quite different and, we think, dramatically improved from the systems we've had in place since the very first Europa Universalis.
First of all, lets start with an overview of the categoeis of income and expenses EU4 has:
- Taxation: How much money each province gives you in tax. As the provinces become more developed and add new structures and buildings, and adds population, you will gather more tax.
- Production: Production income depends on what resources the province has and what good the province is producing. Wine is worth more than fish, spice more than grain, and so on. So your production income depends on what trade goods each province can produce and how much you can get for that trade good, since it all comes down to supply and demand. As your province improves its technology, your income will increase since the province gets better at producing those specific trade goods.
- Trade: This is the income from merchants in various trade nodes. As technology progresses, this value grows as your trade efficiency increases.
- Gold: This is income from goldmines and is tracked separately from any other production, because it affects your country’s inflation.
- Tariffs: Income from overseas provinces and colonies, as you don’t get taxes directly from those. Tariff income is modified by the number of large ships you have relative to your number of ports, since you need naval support for a colonial empire.
- Temporary: Loans, Events, Gifts and other temporary income goes into this category.
When you’re short on gold there are two ways to get extra – bank loans and war taxes. Yes, they are both good for quickly filling up the cash chest, but can have nasty consequences…
- Bank loans last for 5 whole years or more and you have to pay interest on the loan. If you extend a loan because you can't pay, the interest rate goes up.
- War taxes give extra income for the year, but your population won´t like it and might revolt against you if the war taxes continue for too long.
- War Subsidies: This is the income you get from other nations when they want to subsidize your war effort.
- Advisors: Shockingly enough, your advisors do expect to get paid each month. The more skilled the advisor, the higher their pay rate.
- Interest: When you have loans, you pay monthly interest on them. And yes, if you can´t pay the interest, you will go bankrupt. Bankruptcy clears your debt, but may cause your population to revolt and will increase future interest rates. And on top of that, going bankrupt will lower your prestige and your armies’ morale.
- Harbor Fees: What you pay for being allowed to use other nation’s ports.
- War Subsidies: What you pay to other nations when you want to help them survive an expensive war.
- Colonial Maintenance: What you pay in upkeep for your active colonies. Once a colony transitions to a full city, you no longer have to pay this fee.
- Missionary maintenance: What you pay in upkeep for your active missionaries. Converting the heathen can get very expensive.
- Army maintenance: The current cost for your army.
- Fleet maintenance: The current cost for your navy.
What changes to expect to economy in Europa Universalis IV:
Only monthly income and expenses
So what we have done is that we have eliminated the concept of having yearly and monthly budgets. Now you only need to think about what is happening from month to month.
The concept of direct taxes no longer exist, instead all income is treated the same way.
Technology no longer connected to economy
In what is probably a surprise for a lot of players, we have detached the technology investment away from the economy. In the old system, you would invest part of your budget into pursuing improvements in military and civic technologies – this, in fact, would be a large percentage of your spending. The reason we are separating them is because it caused balancing problems between large and small countries, and always had scaleability problems. So in Europa Universalis IV, the economy has nothing to do with the technology. We'll talk about tech in a future developer diary.
Stability no longer connected to economy
Like technology, stability was once something you invested money in to stay afloat. We've cut that tie, too. Increasing the stability of your country is also no longer something you spend cash on, but is tied to other aspects of the game. We will talk about how that works in a later diary!
Since technology and stability are no longer connected to your country’s economy, this means that there are no longer any investment sliders to spend money on.
So, the money flow affects your treasury directly, making it easier to understand how your economy is doing.
You still manage expenses, of course, but these are the ones traditionally associated with empire building – your army and navy maintenance, colonial support and missionary activities. You can adjust how much you spend here to increase or decrease cash flow.
Minting has been banned
In previous Europa Universalis games, any money you didn't spend on investing in tech or stability went to your treasury. This was how you accrued most of the money you would need from month to month as you waited for that annual tax boost. This was called “minting” because you were, in effect, making money for future use. But this would lead to inflation, of course.
By getting rid of the tech sliders, we've effectively done away with “minting”, so that means that inflation has changed rather dramatically. Inflation is no longer incurred by minting too much, but is primarily increased by loans and goldmines. There is still the possibility of reducing this inflation slowly over time, but you will also be able to actively reduce inflation for a cost in power.
Repay Loans now possible
One new thing that has been requested countless times is the possibility to repay loans before they expire. Sitting on a pile of money for five years is too tempting for many people. So now we have added that feature, but you still have to pay all the remaining interest you signed up to pay, so be prepared.
Stay tuned, next week we'll be back with more interesting details about Europa Universalis IV