The UK’s decision to leave the Union will already affect the EU’s budget for next year. „There has already been an unforeseeable situation and now we have to deal with this problem,” said Jens Geier, the MEP who will negotiate on behalf of the Parliament regarding the bulk of the EU’s budget for 2017. MEPs will vote on Parliament’s position in plenary on 26 October. We talked to the German S&D member about how Brexit is affecting the budget and the upcoming negotiations with the Council
The outcome of the Brexit referendum will already affect the EU’s budget for next year as the value of the British pound is dropping. What should be done about it?
The interesting question is, how will the governments in the Council cope with this situation? They now have to decide between three very unpleasant possibilities; one is to ask the British government for more money. I don’t think that this would get a positive reception. Secondly, they can ask other member states to contribute more so that we can balance this artificial deficit created by the depreciation of the pound. This probably won’t be welcomed by the member states. Third possibility is what I would prefer. There’s a lot of money coming into the budget for example from fines and normally we’re not allowed to use this money. It’s only collected and then given back to the member states at a later stage. We could use these fines in order to cover this money.
I was convinced that Brexit would only affect the budget once we knew exactly what Brexit was going to look like, but as you have seen, there has already been an unforeseeable situation and now we have to deal with this problem.
Another issue, of course, will be the rebate. If the Brits leave the EU, they will have to decide in which areas they want to cooperate. For example, if they want to cooperate on research, which would be a win-win situation for the EU and the UK, they would have to give the EU money to finance the European research policies. If they want to cooperate, they would have to pay.
Of course we will not give them a rebate again. But all the rebates for other countries are calculated on the basis of the British rebate, meaning that if the British rebate is lower, then the other rebates are lower as well. That will be an interesting point for the negotiations [for the EU’s long-term budget] that come after 2020. How do we cope with that?