European Union
€60 billion EU Budget reduction because of Brexit

The withdrawal of the United Kingdom from the European Union will mean a decrease of €60 billion euro into the forthcoming EU Budget that will cover the next seven years.

The President of the EU Council, Charles Michel, is proposing this ‘MFF’ Budget will comprise €1,094 billion, that is, 1.07% of economic wealth created by the Union.

For the countries that contribute more than they receive such as Austria, Holland. Sweden and Denmark, this is seen as being excessive while 17 other countries in the ‘Friends of Cohesion’ Group, which includes Malta, see the Budget as not meeting their aspirations.

The EU Parliament and four main political groups have warned they are prepared to reject the Budget with President David Sassoli stating there is a shortfall of €230 billion. Sassoli maintained the Budget cannot be sustained by national contributions from every Member Country but has to have new sources of income.

Aware of these differences, EU Council President, Charles Michel, has spent recent months in personal meetings with Member Leaders, including Prime Minister Robert Abela. During these meetings he listened to their requests and during the last few days released a 50-page document which he hopes will be a compromise although it includes a 12% reduction of cohesion funds, funds mainly used on road projects, and 14% less for funds allocated to agricultural development.

Michel’s Cohesion Fund allocations will result in a 20% decrease for those countries that are well-off and will reward those under-developed Member Countries, particularly those in Eastern Europe.

It is being reported that contrary to seven years’ ago when by the end of February agreement had been reached on the Budget 2014 – 2020, the coming days will be difficult for agreement to be achieved between the 27 Member Country Leaders and there will probably be the need for further meetings in the hope of achieving compromises that would satisfy the majority of countries and institutions.

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