23rd Mar 2018

EU mulls post-Brexit budget options

  • Oettinger said there would have to be cuts in the next budget period (Photo:

The European Commission has unveiled a reflection paper on the future EU budget, amid concerns that the departure of the UK - a net contributor - would stretch the current resources.

"We won't have the UK with us any more, but they were net payers ... so we will have a gap of €10 billion to €11 billion a year," EU budget chief Gunther Oettinger told a news conference in Brussels on Wednesday (28 June), referring to the fact that Britain paid more into the budget than it got back.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

At €150 billion, the EU budget is relatively small if compared to the US federal one, where 2016 spending was $3.9 trillion (€3.4 trillion).

Member states send roughly one percent of their general national income to Brussels, whereas Washington gets roughly 20 percent of the income of federal states.

Government contributions account for about 80 percent of the total budget. The rest comes from customs duties and a carbon emissions trading system.

Brexit comes just as the EU has been tasked with extra work by its member states: stronger border control, combatting terrorism, and forming a defence union.

“We can either spend less or find new revenues,” Oettinger said.

He put forward ideas for what such streams could be.

UK holiday makers could have to pay €5 each time they travel to the EU after their country leaves the bloc.

The EU could also introduce a tax on financial transactions, electricity, motor fuel or corporations, if member states agree..

But the EU will also have to make cuts and shift priorities to make ends meet, Oettinger warned.

In order to stimulate a broader discussion on what to keep and what to slash, the commission set out five possible scenarios for the future budget, with options ranging from carrying on as usual to far-reaching changes with less support to agriculture and cohesion policy, which currently take more than 70 percent of the money.

While member states are generally unwilling to pay more into the budget, it is likely that proposals to cut funding to agriculture or other programmes will turn out to be controversial.

The paper also questions the length of the budget period, which is currently runs over a seven-year span. This could be shortened to five years, to coincide with the mandates of the European Parliament and the commission.

Another proposal on the table is whether one should introduce conditionality on EU funds, so as to stop them from going to countries that violate the rule of law or refuse to take refugees.

When asked if he would support linking funds with such democratic conditions, Oettinger said he was “entirely open to the result to be achieved”, and welcomed a discussion on the matter.

Member states, the European Parliament and civil society will now be asked to discuss the five scenarios.

Their views will feed into the proposal for the next long-term budget, which will start running in 2021. The commission will present this budget bill in the middle of next year.

Brexit would already eliminate the rebates enjoyed by member states such as Denmark and Sweden, Oettinger said.

The budget could also be augmented by fines, such as the recent ones against Apple and Google, who were found to be in breach of EU antitrust rules and charged with paying billions in fines.

But these fines would take many years to end up in the EU coffers, because of lengthy appeal processes and Oettiinger said it was not possible to count on such income to finance EU policies.

UK visitors to pay into EU budget after Brexit

The EU Commission says extra revenue generated from a new visa-free travel scheme, to launch in 2020, would go to the EU budget, reducing member state contributions.

UK leaves fishing convention amid Brexit talks

The UK announced it would leave the London fisheries convention, which allows mutual fishing close to the coast, arguing that it is taking back control of its waters. But Brussels warns: Brexit talks will decide that.


Poland ready to be EU budget net contributor

Poland would accept increasing its contribution, but will oppose any politicisation of EU funds, says its deputy minister of economic development.

Juncker pushes for bigger post-Brexit EU budget

Europe is worth 'more than a cup of coffee a day', the EU Commission president said, in favour of a bigger EU budget as the UK leaves and takes its share of the budget contribution with it.

VW dismisses complaints on Dieselgate fix

'I think customers who want to get information (...) are able to receive information if they want," VW management board member Hiltrud Werner told EUobserver. Consumer groups disagree.

News in Brief

  1. EU wants 'Paris' climate strategy within 13 months
  2. Workload of EU court remains high
  3. Spain's supreme court charges Catalan separatist leaders
  4. EU calls for 'permanent' exemption from US tariffs
  5. Summit backs guidelines for future EU-UK talks
  6. Macron support drops as public sector workers go on strike
  7. EU leaders condemn Turkey for illegal actions in Aegean Sea
  8. Parliament must publish 'trilogue' documents, court says

Stakeholders' Highlights

  1. EUobserverStart a Career in EU Media. Apply Now to Become Our Next Sales Associate
  2. EUobserverHiring - Finance Officer With Accounting Degree or Experience - Apply Now!
  3. ECR GroupAn Opportunity to Help Shape a Better Future for Europe
  4. Counter BalanceControversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  5. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  6. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  7. Martens CentreEuropean Defence Union: Time to Aim High?
  8. UNESDAWatch UNESDA’s President Toast Its 60th Anniversary Year
  9. AJC Transatlantic InstituteAJC Condemns MEP Ana Gomes’s Anti-Semitic Remark, Calls for Disciplinary Action
  10. EPSUEU Commissioners Deny 9.8 Million Workers Legal Minimum Standards on Information Rights
  11. ACCAAppropriate Risk Management is Crucial for Effective Strategic Leadership
  12. EPSUWill the Circular Economy be an Economy With no Workers?

Latest News

  1. Nordic states discuss targeted Russia sanctions
  2. Commission sticks to its line on Barroso case
  3. Germany and France promise new Russia sanctions
  4. EU rejects US trade 'gun to the head'
  5. Tariffs and Turkey will top This WEEK
  6. EU leaders roll over Brexit talks amid Trump and Russia fears
  7. Europe needs corporate tax reform - a digital tax isn't it
  8. EU data chiefs rally behind UK over Cambridge Analytica