Brexit will open up a vast €10.2billion (£8.99bn) hole in the EU’s coffers when the UK permanently quits the bloc in 2021 – with those four states all facing much bigger bills than other European Union nations because of the how Britain’s annual rebate is calculated.
The new research, published by the European Parliament, will spark genuine fear in Brussels as three of the four nations – Austria, Sweden and the Netherlands – already have very large and growing Eurosceptic populations.
And it has prompted celebrations from Brexiteers who say the study shows Britain was right to leave the EU – with Brussels no longer “able to milk this cash cow”.
The situation arises because the UK, under Margaret Thatcher’s leadership in 1984, negotiated a 66 per cent discount on its net contribution to the EU – which the other countries in the bloc at the time agreed to make up for.
Four EU states will pay a particularly high price for Brexit
But Austria, Sweden, Germany and The Netherlands made special deals to pay only 25 per cent of their share of the rebate.
So when the UK exits, the “rebates on the rebate” will no longer apply, meaning €1.7bn (£1.5bn) will instead have to be paid – and redistributed from the four countries to other member states.
Under the projections from the European Parliament’s Directorate-General for Internal Policies, Austria will have to pay a massive €413million (£363m) a year extra, or €47 (£41) for every citizen, to close the funding gap left behind by the UK’s exit. This means the annual budget contribution is set to rise by a staggering 15.33 per cent.
On a per capita basis only the extremely-eurosceptic Swedes will get a worse deal than Austria. Citizens in the Scandinavian nation will each have to pay €55 (£48.50) more every year.
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After Brexit the EU won’t be able to milk this cash cow any longer
Ukip MEP Jonathan Arnott, the party’s economy spokesman, said the news would spark a further rise in euroscepticism across the bloc.
He said: “The UK has been the second-largest contributor to the EU budget for many years, but after Brexit the EU won’t be able to milk this cash cow any longer.
“Without the British taxpayer footing the bill, I wonder whether other countries will start to realise that the EU is all take and no give? The Austrian, Swedish and Dutch people aren’t exactly happy with the EU right now anyway – how will they feel when they’re suddenly expected to stump up more money?
“But the future is rosy for Britain when we start looking to the wider world. Eventually, once we’ve paid the ‘divorce bill’ that Theresa May should never have agreed to, we’ll have our annual EU membership fee back to spend right here in the UK helping our own people. With the NHS in crisis we need that money now more than ever.”
The calculation, which was presented at a committee meeting in Brussels at the end of last year, is based on a scenario in which the EU decides to maintain the current budget after Brexit.
The union’s spending could simply be reduced t to compensate for the missing British contribution, but the European Parliament is adamant that the annual budget should be increased to pay for ambitious new projects rather than cut, which could see the tax burdens on Swedes, Austrians and the Dutch – as well as Germans – hiked even further.
Sweden, Austria and the Netherlands have long been among the most Eurosceptic on the continent and cynicism towards Brussels has increased in recent years.
In an EU-funded ‘Eurobarometer’ survey last year, citizens of the nations were scathing about paying anymore into the bloc’s budget. Fifty-eight percent of Austrians, 57 per cent of Swedes and 55 per cent of Dutch respondents said the EU’s political objectives “did not justify” any further increases in the Union’s budget.
Brexit sent shockwaves across Europe – with four states also facing huge bills
The news has been poorly received in the Netherlands, where Jeroen Dijsselbloem, former Dutch Finance Minister & current President of the Eurogroup, said: “The British were a net contributor to the EU budget and now they are leaving. We don’t have any advantage from that.”
MP Pieter Omzigt, a fiscal conservative from the Christian Democratic Appeal (CDA) added: “The Netherlands shouldn’t foot the bill. We are already the biggest net contributor.”
Even liberals D66, considered the most pro-European of all Dutch parties, said it would oppose a higher national contribution.
MP Kees Verhoeven said: “A smaller EU means a smaller budget. It should never mean that other member states would suddenly have to pay more.”
The EU is facing growing euroscepticism as the reality of Brexit finally hits home
And Austrian MEP Harald Vilimsky from the ruling Freedom Party told the Vienna Metro website: “The financial shortfall created by Brexit needs to be filled by cost-cutting and not with additional costs for the remaining member states. But instead of making savings on the bureaucratic apparatus, the EU is taking advantage and Juncker and Co demanding that the EU’s net contributors must once again dig ever deeper into their pockets and finance the political mess they leave behind.
“Such a policy is not only unreasonable but also irresponsible to the voters.”
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The authors of the shock study concluded the Brexit funding gap will, ultimately, have to be met by a combination of increased tax on EU citizens and moderate spending cuts.
Eulalia Rubio, Senior Research Fellow at Jacques Delors Institute and one of the authors commissioned by the European Parliament to analyse the Brexit budget impact, claimed the European Commission may well choose a softer approach.
She said: “The parliament asks for budget increases, but it always does. Another plausible scenario is that the commission will propose a split of the budget gap down the middle – half of it covered by spending cuts, the other half by increased contributions.
“This approach will still impact the four rebate countries the hardest, but not quite as much.”