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24th Oct 2020

UK, Netherlands get nine extra months to pay EU bill

  • Dutch MPs want extra answers about their country's contribution to the EU budget (Photo: Images_of_Money)

EU finance ministers on Friday (7 November) extended until 1 September 2015 a deadline for contributions to the EU budget, given the "unusually" high corrections this year.

The corrections are made automatically each year when countries report their gross national income - with some member states getting money back, while others have to pay more.

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EU budget commissioner Kristalina Georgieva will table a proposal in the coming weeks detailing the tweaks to the existing rules, which would have seen countries pay interests on every month of delay if they didn't pay their contributions by 1 December.

She acknowledged that the budget corrections became a political hot potato this year because they were "unusually large" - €9.5 billion in total, compared to €360 million last year.

"Because in previous years they were relatively small, they stayed under the radar screen of politicians and I admit, for us in the European Commission as well."

Under the new rules, if in one year the corrections exceed €5 billion or twice the monthly contribution for one member state, a deadline extension will kick in, allowing national treasuries to pay in instalments by 1 September of the following year.

The national contributions were not discussed, but since Britain has a yearly rebate on its contribution - negotiated in the 1980s by then-prime minister Margaret Thatcher - this means that it will only have to pay around €1 billion by next year, instead of €2 billion by December as originally calculated by the commission.

"We've halved the bill, we've delayed the bill and we've changed the EU rules permanently," British finance minister George Osborne said on his way out of the meeting.

His claims were denied by other finance ministers, who said that Britain's contribution was not changed and that it was all due to the British rebate system.

Asked about it, Georgieva said that "given that payments are due over a longer time, the UK rebate applies, so when the time comes for payment, it will be around €1 billion."

Meanwhile, the Netherlands - whose €642 million correction relative to its overall contribution is higher than the British one - has demanded extra explanations from the EU statistical office, Eurostat.

A parliamentary hearing with Eurostat officials is set to take place in The Hague on 12 November. The parliament will also question finance minister Jeroen Dijsselbloem, the following day.

Since the 1 December deadline will be scrapped this year, it also means that countries set to receive money, such as France and Germany - will only get it next year, once the others have paid their corrections.

Georgieva said it was yet unclear if the repayments will be also be made in tranches or in one go.

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