Monday

18th Jun 2018

Juncker pushes for bigger post-Brexit EU budget

  • Juncker argued for levelling disparities within the EU, but insisted the continent would not be a place where there was "free beer" for all (Photo: European Commission)

European Commission president Jean-Claude Juncker called on Monday (8 January) for the EU-27 to pay more money into the bloc's joint long-term budget, after the UK leaves a gap in the common finances following Brexit.

Juncker said the EU's next budget from 2020 onwards should be more than one percent of the continent's GDP.

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"We need more than one percent of GDP if we are to pursue EU policies and fund them adequately," he told an audience at a conference in Brussels.

Juncker pointed to new areas where the EU has to increase its common spending, such as migration, defence, internal and external security.

The current so-called 'multi-annual financial framework' is just under one percent of the GNI (gross national income), the first long-term EU budget that was smaller than the previous one after then UK prime minister David Cameron strongly pushed for tighter common expenses .

Juncker also warned however that the hole the UK punches in the post-2020 budget should not be filled in by substantially cutting existing EU policies such as cohesion funds or the common agriculture policy, which make up more than 50 percent of the budget.

"I am not in favour of drastic cuts in the cohesion policy sector, it is still important, not only for the countries benefitting, but for the others too," Juncker said, adding that disparities between income and living standards across the EU should be levelled.

He added however that both policies would have to be modernised and said financial discipline should not become loose.

"I'm not at all in favour of Europe becoming the place where it is free beer for everybody," he quipped.

However, he argued, EU citizens all over Europe could afford to spend more on common policies.

Price of a coffee

"It costs one cup of coffee a day for an EU citizen. I think Europe is more than a cup of coffee a day," Juncker pointed out.

Earlier estimates suggested that Brexit will leave a shortfall of €10.2 billion per year in the budget.

Juncker also said EU member states should adopt the new budget before the European elections in the spring of 2019. The EU commission is expected to unveil its budget proposal in May.

The previous budget talks for the 2014-2020 period took almost 18 months and several EU summits to conclude.

Budget commissioner Guenther Oettinger later added at the same event that EU countries should agree on a compromise at their summit in Sibiu, Romania on 9 May 2019.

Oettinger backed up his boss on cohesion funds, saying there is a need for "intelligent transfers" in the EU.

He pointed out that cohesion funds – money flowing from richer EU countries to poorer neighbours – are investments that also profit the net contributor countries.

"Money finds its way back to Germany industry," Oettinger, himself German, pointed out as an example.

He said a "sensible" cut of 5-10 percent to cohesion funds is possible.

Oettinger however argued that "extra new money" is needed to deal with migration, funding the EU's borders, and finance development in the countries where migrants arrive from.

"If you want to finance migration by cutting cohesion, you are going to split the EU family," Oettinger warned.

EU mulls post-Brexit budget options

EU seeks novel ways to plug a Brexit-based budget hole of up to €11 billion, but income from fines, such as the one on Google, cannot be relied on.

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.

Interview

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.

Tying EU funds to politics could be double-edged

EU taxpayer money to countries challenging EU core values? The answer might seem obvious, but not to those on the receiving end of the EU subsidies, who argue that most of the money trickles back.

Juncker to speak out on post-Juncker EU

The European Commission chief is to call on EU leaders to increase the EU budget after 2020 and choose his successor through the "Spitzenkandidat" process.

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