EXPOSED: The huge rift between EU member states over how to plug Brexit budget black hole

Posted on Oct 27 2017 - 2:32pm by admin

A dynamite briefing shows how different countries are openly at loggerheads over whether to maintain the club’s gargantuan spending levels once it loses its second biggest net contributor. 

EU budget chiefs have admitted they will be down by around £10 billion a year once Britain has quit the bloc in 2019, meaning countries will either have to pay more or receive less. 

British MEP Steven Woolfe told Brussels faces a “huge political headache” over the crisis, as it will have to get all 27 leaders to agree to a set of unpalatable compromises. 

The Commission insists that it should not be required to cut its cloth accordingly by reducing the size of the budget, and instead wants member states to make up half of the lost cash. 

EU finance chief Gunther Oettinger said the other £5 billion should come from efficiency savings, but that would mean persuading national capitals to sanction saving in their own backyard. 

However, an explosive briefing compiled by officials at the EU Parliament shows there is huge disagreement between the 27 member states on the best way forward beyond March 2019. 

The dossier gives the positions of the Governments in all 27 of the remaining member states, showing how their stated priorities are openly openly in conflict with not only each other but also the Commission and MEPs. 

European leaders have to put forward their proposals for the club’s next seven-year spending cycle – called the Multi-Annual Financial Framework (MFF) – by January 1, 2018.  

The briefing shows that a core of countries have already formed a strong position against paying any more into the budget, and instead want to see it cut by £10 billion to mark Britain’s exit. 

Austria’s leader-in-waiting Sebastian Kurz has vowed that Vienna will not contribute a penny more, and instead suggests “efficiency gains and a staff reduction in order to close the financial gap”.

That position is backed up by Finland, where officials state that the “Brexit gap will need to be taken fully into account by decreasing the next MFF accordingly.” 

Meanwhile the Government of the Netherlands has already committed to forming a coalition of like-minded member states in order to “avoid increased payments to the EU budget after Brexit”. 

Denmark has expressed a similar view, with Copenhagen saying that whilst the UK must honour commitments already made the “EU budget burden for the remaining 27 Member States should not increase after Brexit”. 

Elsewhere the Latvian government indicates an openness to reducing payment levels, so long as its farmers do not lose out, whilst Italy pleads poverty and says it cannot afford higher contributions. 

And Sweden says that when the UK leaves the bloc’s budget “will have to be reduced by the corresponding amount”, suggesting an “expenditure ceiling that does not exceed 1 per cent of the EU’s GNI”. 

However, this final proposal puts Oslo firmly at odds with those countries who want to maintain and even increase the budget in response to Brexit despite losing the UK’s mammoth contribution. 

Portugal states that no cuts should be made to two of the bloc’s biggest programmes – the Common Agricultural Policy and Cohesion Fund – after Brexit instead suggesting “raising the EU budget ceiling to 1.1 % and 1.2% of GNI”. 

Several other countries who are amongst the biggest recipients of Brussels cash are also unsurprisingly defensive about spending levels, given they have the most to lose from Britain’s decision to quit. 

The Cohesion Fund – a massive development programme designed to boost the economies of the club’s poorer members – is vociferously defended by Croatia, Estonia, Hungary, Lithuania, Poland, Romania and Slovakia. 

Belgium, meanwhile, insists the “budgetary contributions of the UK have to be maintained” by member states paying in more and even suggests a major EU job fund should be increased to help cope with any economic turbulence. 

France, led by new federalist president Emmanuel Macron, proposes allowing the EU to raise more direct taxes in relation to areas like green energy and puts forward plans for a eurozone budget. 

And Angela Merkel’s Germany, which many member states will naturally look to to cover the black hole, acknowledges the budget questions is “particularly difficult” without proposing any solutions. 

British MEP Steven Woolfe told “They are truly worried about that black hole. It’s a huge political headache. They’ve got to sit back at the table and see who’s going to add the money into the pot and if not where are the cuts going to go.

“And if there’s one thing Brussels hates it’s cuts because they’ve got to get 27 leaders around the table and each of those countries are reliant on the jobs they have built up and the power and influence from EU funding. It involves a huge amount of negotiations. 

“Who’s going to put the money in? Some of those countries can’t afford to increase their contributions. You’ve got 13 per cent of a budget that’s got to be redistributed somehow. 

“It means cutting jobs in those countries or funding who have basically been promised money to keep the EU show on the road and nobody’s going to like seeing their budget cut.” 

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