EU budget chief says member states must cough up extra £6.5bn a year to cover Brexit loss

Posted on Sep 27 2017 - 3:44am by admin

Gunther Oettinger said Brussels was facing a budget black hole of up to £13 billion after Brexit – half of which should be covered by “fresh money” from the member states. 

His remarks, during a speech in the Belgian capital yesterday, are likely to cause alarm in those member states like Austria and the Netherlands which are strongly opposed to paying in any more cash. 

The German official, who was pictured standing next to Angela Merkel on the podium at her election victory rally on Sunday, said the EU was also facing a budget shortfall due to the increased challenges it faces. 

He said more money would be needed for centralised border management, combatting terrorism and research and development which would require new funds on top of these needed to cover Brexit. 

His remarks raise the prospect of wealthier member states in particular, like his homeland Germany, being asked to pay billions more into the project in the short to medium term. 

In a keynote speech on the future of Europe’s finances, Mr Oettinger promised that the EU Commission would “prove added value” from the extra cash, but added that meant member states were duty bound to pay up. 

On the Brexit shortfall, he said that 50 per cent of the lost £13 billion should come from efficiency savings within the bloc, but that the other half would have to come from the member states. 

In reality that amounts to just £15 per person in the remaining 27 countries, but budget payments are a political hot potato in those states where euroscepticism has been on the rise. 

Austrian foreign minister Sebastian Kurz recently insisted the “contribution of the net payers will not be increased” because of Brexit and called for a slimmed down bureaucracy – a position supported by the Netherlands. 

Mr Oettinger said: “With income when we lose our British friends then for a whole period we will lose 12-15 billion euros per annum in various areas, because despite the rebate the British were net payers. 

“We have to be in touch now to see how we’re going to fill these gaps. Perhaps we need cutbacks and also some fresh money. We need of course unanimity for the Multi-Annual Financial Framework (MFF) so we need ministers and indeed heads of state and Government to come together on this.

“So we’re going to have to find the middle group, because of the gap that there will be. We need perhaps to save 50 per cent and find 50 per cent fresh money to fill the gaps due to Brexit.” 

The MFF is the seven-year cycle by which the EU’s spending plans are set. The current one, which Theresa May has promised to honour in full, is due to expire in 2020. 

But beyond that the bloc will have to make do without British taxpayers’ cash, confronting a period in which several new member states could be set to join the club as extra net recipients. 

And on top of that, as Mr Oettinger observed, the EU faces a number of challenges that will require an increase in the Brussels budget if they are to be tackled at European and not country level. 

The German eurocrat did not put a figure on the amount of extra cash the bloc may need, but did say he anticipated that 90 per cent of it would need to be “new money” on top of the existing budget. 

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