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Thursday 15 November 2018

Eight Eastern EU members agree to increased payments to next EU budget

German EU Commissioner for budget and human resources Gunther Oettinger
German EU Commissioner for budget and human resources Gunther Oettinger

Krisztina Than

Eight Eastern European EU countries agreed on Friday to support an increase in payments by member states in the bloc’s next long-term budget, to help fill the hole after net contributor Britain leaves.

Ministers and other representatives of Hungary, Poland, the Czech Republic, Slovakia, Slovenia, Croatia, Bulgaria and Romania met in Budapest with the EU’s Budget Commissioner Guenther Oettinger to discuss issues including the bloc’s next budget plan.

The largest source of revenue in the EU’s budget is a uniform percentage levied on the gross national income (GNI) of each member country.

The ex-Communist countries of the east are mostly net recipients of EU funds, and worried that a shortfall in the bloc’s budget would leave them with less cash.

Oettinger said last month that the next EU budget should increase from around 1 percent of EU output to slightly more than 1.1 percent, to make up for funds the bloc will no longer receive from Britain.

Britain’s exit in March next year will deprive Brussels of some 12 billion euros from an annual budget now running around 140 billion euros.

That hole has already prompted a round of sparring between other net contributors in the West, which do not want to make up the shortfall, and the ex-communist Eastern states, which say they should not suffer from cuts in EU subsidies.

“The eight countries agreed with the increasing of the GNI-proportionate payment, which is a major success of the day,” Orban’s chief of staff Janos Lazar told a news conference.

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“The eight countries opened the opportunity that the payment should increase even up to 1.1 percent (of gross national income).”

“We are encouraging the Commission to have a very ambitious budget because we need new fresh money for new tasks,” he added.

Oettinger reiterated that once Britain leaves the EU certain budgetary cuts will be necessary.

“I am extremely grateful for the eight member states that they were willing to contribute a bit more,” he told the same press conference.

Lazar said the eastern members expected the EU to reduce bureaucracy and make the budget process simpler, faster and cheaper.

“Cohesion is badly needed. It was successful but it is not over as yet,” Lazar said.

The €12bn shortfall in EU budgets could be filled by increased contributions from Member States, the EU Agriculture Commissioner Phil Hogan has said.

Brexit will leave a €12bn hole in the EU budget, according to Mr Hogan and calls by some Member States to 'beef up' security, defence and migration spend could put increased pressure on CAP funds.

"Some Member States are looking for more policy co-ordination at EU level on these issues and this would require financial support as well," he said.

To fulfill a budget he said the EU would have to ask Member States to contribute more of gross national income from the current 1pc

"If they decided to increase that from 1pc to 1.1pc or 1.2pc as the Budget Commissioner has been asking, that helps enormously in filling the gap in our resources."

Mr Hogan also said that the former EU Commissioner Mario Monti and recommended the EU budget needs reform, both on the revenue and on the expenditure side, to address current challenges and to achieve tangible results for European citizens, and said that these proposals could be considered by Member States too.

"We're all well aware you can't do anything without money and the Commission will present a proposal on the multi financial framework in May 2018," he said, where opportunities to fill the budget gap would be discussed as would reductions in budgets.

Some 44m jobs are directly and indirectly in agriculture across Europe, he said, and as the CAP evolves it becomes more and more a CAP for everyone.

"We need a well funding budget for the CAP, so the policy can continue to deliver the objectives which are in the interests of farmers and society as a whole.

"As the CAP evolves with a greater focus on the provision of public goods it will become more of a CAP for all the people of Europe."


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Reuters