Skip to main content

EU Commission launches Post-Brexit budget

The 2021-2027 budget called the “Multiannual Financial Framework” (MFF) will trigger battles among member states
posted onMay 2, 2018
nocomment

The European Commission meets on Wednesday to agree proposals for its 2021-2027 budget. The EU's executive arm is seeking to increase the seven-year EU budget to approximately €1.25tn, shifting spending priorities towards migration, defence and innovation the Financial Times reported. “A budget for a Europe that protects, empowers and defends,” declared the Commission in its draft plan, seen by Reuters. 

Given the withdrawal of the UK, a significant contributor, the post-Brexit budget proposal is set to kick off a political battle in the bloc over how to fill the funding gap left by Britain’s exit next year. Overall the budget plan aims to trim spending on traditional programmes such as agriculture and shift funds towards new priorities such as research and digital technology, euro zone stability, defence and frontier guards. 

Budget Commissioner Guenther Oettinger (pictured), who will present the proposals after the morning meeting chaired by President Jean-Claude Juncker, told German television that direct payments to farmers, which account for around a third of the entire budget, would be cut by about 5 percent overall. 

“There will be cuts, which many countries will complain about, and there will be new spending, which the others will complain about,” Οettinger said. 

Guenther Oettinger EU Budget Commissioner

 

Some of net contributors such as the Netherlands and Sweden have insisted they will pay no more to fill the Brexit gap, while poor, eastern states demand no cuts. Brussels will also unveil stricter “financial management” rules that allow funds to be cut off to countries which fail to meet “EU values” in terms of independent courts.

“The rule of law is an essential precondition for sound financial management and effective EU funding,” the draft budget proposal says.

According to Politico's Lili Bayer, who is covering budget debates “the Commission is expected to make a fairly modest proposal. It will suggest allowing EU officials to examine issues like a country’s ability to detect and punish fraud through an independent legal system.” Budapest-based Magyar Idők newspaper considers the plan “a vengeful answer” by the European Union to Hungary’s migrant policies. 

The draft also foresees Brussels raising more cash for itself rather than relying on national contributions,  a levy on the use of non-recycled plastics, sharp increases in spending on border defences against illegal immigration as well as on foreign aid. 

This is a developing story. To be updated soon.

European Commission President Jean-Claude Juncker and EU Budget Commissioner Günther Oettinger

(European Commission President Jean-Claude Juncker and EU Budget Commissioner Günther Oettinger presented their proposal for the EU's 2021-2027 budget to MEPs on Wednesday. Photo Credit: European Commission)

UPDATE 02/05/2018 21:18

The European Union unveiled its long-awaited budget blueprint for the period from 2021 to 2027, worth 1.279 trillion euros and equivalent to 1.14% of the EU27's gross national income. The departure of Britain, a net contributor, in 2019 leaves the bloc with what Juncker says is 15 billion euro gap in its accounts, meaning other member states will have to pay more.

The announcement of the European Commission's new long-term budget proposal was met with criticism by some member states. France’s agriculture minister called it “simply unthinkable” to shave 5 percent off Brussels’ hefty spending on farm subsidies. Poland,  warned of “a long road ahead” to reach the unanimous compromise required to put the budget into effect.  “A smaller EU ... should have a smaller budget,” the Dutch Prime Minister Mark Rutte said. The proposal “is still far from an acceptable solution,” said Austrian Prime Minister Sebastian Kurz. “Our aim must be for the EU to become slimmer, more economical and more efficient after Brexit,” he added. 

Other MEPs praised the budget plan. Guy Verhofstadt, the Belgian MEP who leads the Parliament’s Liberal group said: “This MFF, it’s not a revolution, but its a break with the past.” 

"The new budget is an opportunity to shape our future as a new, ambitious Union of 27 bound together by solidarity. With today's proposal, we have put forward a pragmatic plan for how to do more with less. The economic wind in our sails gives us some breathing space but does not shelter us from having to make savings in some areas. We will ensure sound financial management through the first ever rule of law mechanism," said European Commission President Jean-Claude Juncker, adding that he believes the budget should be agreed upon before European Parliament elections in May next year.

"These negotiations normally take two years," a diplomatic source told AFP. The last MFF took 29 months to be sealed. Maybe this time will take less. 

With reporing by Reuters, AFP, Euractiv