Spotlight: Post-Brexit EU has to adapt budget for loss of second biggest contributor

After the conclusion of Brexit negotiations, the European Union (EU) will have to adapt its budget to take into account the loss of funding from Britain, its second biggest contributor, members of European Parliament (MEPs) told Xinhua.

Bernd Kolmel, spokesman of the European Conservatives and Reformists (ECR) Group in the European Parliament's budget committee, made clear the significance of the British contribution.

"In absolute figures, the United Kingdom has been the second biggest net contributor to the EU budget. We talk about 5 billion euros (5.32 billion U.S. dollars) yearly, which will be missing in the future," Kolmel stressed.

Despite the massive shortfall this seemed to imply, Kolmel saw a straightforward approach, comparable to private sector concerns.

"Like a private company, the European Union has to adapt its payments to the new revenue situation. If a private company loses a main client, savings have to be made in order to compensate this loss. Now the EU will lose a big net contributor, so the EU budget has to be adapted accordingly."

"Brexit is also a chance to start a much-needed budget reform", in order to develop a "sustainable, balanced and transparent budget", he added.

"The problem will not take place now," said Gerard Deprez, a Belgian MEP from the Alliance of Liberals and Democrats for Europe group, who sits on the Parliament's budget committee.

"The impact of Brexit will be perceptible after 2020 which will be the last year of the actual Multiannual Financial Framework," Deprez said.

For the future, "the commitments will decrease in proportion to the UK contribution to the budget but during the years 2021, 2022, 2023, payments will be more affected because they are, to a large part, the result of commitments made at the time the UK was a member of the EU," the Belgian MEP explained.

Regarding continued contributions to EU cohesion policy after Brexit, Kolmel, also deputy federal chairman of German party the Liberal-Konservative Reformer, stressed the need for a "a fair deal between the remaining EU member states and the United Kingdom both with regard to the thousands of EU regulations and directives and to budgetary issues".

"I would like to refer to the example of countries such as Norway or Switzerland. Both are non-EU-countries and contribute with own programs to the cohesion in Europe," said the German conservative.

"I could imagine, that also the UK will start such a program, either alone or together with other European partners," Kolmel said.

Deprez said Britain would not be forced to contribute to EU cohesion policy after it had left the union, but that it would still be responsible to honor budgetary commitments it made while still a full member state.

Both MEPs agreed it was clear that London would no longer be a part of the EU single market.

"If the UK requests to participate in certain European programs, it will have to pay appropriate budgetary contributions as a third country," Deprez said.

Kolmel also warned against thinking of Brexit negotiations in terms of tough versus soft tactics.

"We should use better fitting words such as fair and sensible negotiations with foresight," the German MEP argued.

"It is clear, that at the beginning of such very complex negotiations both sides will formulate harsh conditions in order to save the own interests."

"Nobody will win anything if the EU of 27 and the United Kingdom will not conclude a deal which is to the benefit of all actors," Kolmel warned.

"Therefore, I am confident that at the end we will have a good deal, which allows to maintain excellent economic and trade relations between the remaining EU member states and the United Kingdom," he said.

The Jacques Delors Institut, a pro-EU think tank, estimated the "Brexit gap" in the European budget would be approximately 10 billion euros, presenting a significant challenge for negotiations for the next Multiannual Financial Framework for 2021-2027. Endit