Quote Originally Posted by Ludens
This is intentional, and applies to almost all factions. Most nations seemly could not afford to run around with multiple armies, so the EB team increased the upkeep from all units. This also makes your armies more valuable; as a loss is expensive. Basically, at the start of the game you are faced with a simple choice: either use your units or disband them. Especially get rid of fleets: they are criplingly expensive and in a 1:1 encounter the A.I. always wins (at H and VH anyway).
This is a very important point and the EB team should put it in bold capital letters of any readme/documentation for the mod. (Unless you understand the clever design and intention it represents, you will tend to find the mod frustratingly hard to begin with).

But one quibble - is it really true the AI fleets win 1:1 encounters at higher difficulty levels? That was true in v1.0 RTW and was why I was reluctant to play above medium campaigns. But at some stage it was changed and I have not noticed an imbalance in naval battles even on VH campaigns (and since I play a lot of EB & RTR, I'd conclude that the change was implemented by 1.2).