Page 4 - Feb 2018 PDF_Neat

The Blue Moon
Diplomatic Circle
EU Battle for Post-Brexit Budget

From Ram Yadav in Bonn

As Britain prepares to leave the Europen Union in 2019, leaders of the remaining 27 countries are taking up positions for a battle over EU
Budgets.
ompensating EU's post-brexit
budget deficits in the absence of
CBritish contribution is going to
be a hard nut to crack. That was the
impression EU leaders gave in their
summit meeting in Brussels on
February 23 while discussing the post-
Brexit contibutions for the EU budgets.
With the loss of around 10 billion euros
(12.3 billion dollar) a year post Brexit,
the budget proposals to fill this gap
include hiking country contributions,
cuts in agriculture and cohesion funds,
and opening up new sources, including
taxes on polluting companies.
Germany with its largest GDP in the EU
is also the largest net contributor to the
common budget, followed by Britain,
France and Italy. Other contries believe
that Germany, with its large economy
and huge trade surplus every year in the
inner EU trade, can easily take a lead
and raise its contribution. Germany
might even do so, but would like to
couple its willingnes with a
conditionality: "When EU structural
funds are redistributed we need to
make sure that the criteria for the
distribution in future reflect the communist countries like Hungary, Poland, Czech Republic the budget. The Dutch government says in a position paper:
c o m m i t m e n t o f r e g i o n s a n d or Slovakia refuse to take in mainly Muslim migrants, some ''The common agricultural policy and the cohesion policy
communities to take in and integrate in the west have suggested penalizing them via the EU should be ambitiously reformed, These reforms should also
migrants," Chancellor Angela Merkel budget. yield the majority of the financial savings needed to
demanded. She wants that other EU French President Emmanuel Macron criticised what he said compensate for Brexit and to finance new priorities.'' The
countries should also take in some of were poor countries abusing EU funds, designed to narrow European Commission will use the summit discussions as
the more than a mllion refugees who the gap in living standards after the Cold War, to boost their guidance for a proposal in May on the 2021-2027 EU budget.
came to Germany in the last two years. own popularity while ignoring EU values on civil rights or to Budget chief Guenther Oettinger from Germany said the
They are costing Germany much more undercut Western economies by slashing tax and labour Brexit-induced hole should be filled ''using 50 per cent
than the expected post-Brexit rules. Noting the history of EU "cohesion" and other funding savings and 50 per cent fresh money.'’
contribution shortfall. Chancellor for poor regions as a tool of economic "convergence", A possible scenario F r o m B R o a n m n Y a d a v i n

Merkel proposed that regions which Macron told reporters: "I will reject a European budget Cutting the post-Brexit budget by a sum approximately
are taking in and trying to integrate which is used to finance divergence, on tax, on labour or on equivalent to the U.K.'s current share of 12.5 per cent would
refugees should have their efferts values." mean halting funding for Western European countries from
rewarded in the allocation of EU Nationalist governments the EU's regional aid program, according to a study carried
funding Poland and Hungary among the ex-communist states which out by the Commission's regional affairs department. Under
Commission wants 10 per cent joined the EU this century, are run by right-wing nationalist such a scenario, the EU would be able to provide ''support for
increase governments at loggerhead with Brussels over their efforts less developed regions only,'' says the study. ''Support for
EU budgets are made for a period of 7 to influence courts, media and other independent Germany and mainland France would be discontinued,'' the
years. The next budget will be due in institutions. Poland's ruling party, which calls itself ''Law & paper says. Benelux and Scandinavian countries, Ireland
2021. At around 140 billion euros (170 Justice party,'' has pushed the democratic-principles and Austria would no longer receive any money under the
billion dollars) a year, the current EU question onto the EU political agenda by its assault on EU's main subsidies regime. Outside of Eastern Europe, only
budget represents just about 1 per cent domestic judicial independence. Poland, Paradoxically, is Cyprus, Greece and Portugal and the southern regions of
of economic output in the bloc or some also the biggest recipient of EU funding. Italy and Spain would continue to have access to EU
2 per cent of public spending, but for all National transfers make up about 80 per cent of the EU's ''cohesion funds,'' which currently account for roughly a
that it remains one of the hottest coffers, and farm subsidies and regional-development -- or third of the EU budget.
subjects of debate for members. The “cohesion” -- aid together account for around 70 per cent of
EU Commission has suggested that the
next budget should be increased by
about 10 per cent, but there was little German President in New Delhi
sign during the summit that the
governments with cash are willing to
pay that..
„When the UK leaves the EU, then that
part of the budget should drop out,"
said Dutch Prime Minister Mark Rutte,
who leads a group of hawks including
Sweden, Denmark and Austria. Mr
Rutte added that "in any case, we do not
want our contribution to rise, we want
modernization." With modernization
he meant reconsidering the EU's major
spending on farm subsidy and regional
cohesion in order to do more in
defense, research and controlling
migration. Contradicting Mr Rutte and
his asossiates, Czech Prime Minister
Andrej Babis said his priorities were
"sufficient financing of cohesion policy
and a good deal for businesses from the
EU's agricultural subsidies.“
A deeper divide between east and
west
The February 23 EU summit in
Brussels was a clear evidence of a
deeper divide between the counries of
east and west Europe. Never before President of the Federal Republic of Germany, Dr. Frank-Walter Steinmeier calling on
have they been so apart than now.
Aggrieved that some eastern ex- President Ram Nath Kovind at Rashtrapati Bhavan in New Delhi
4 The Blue Moon 16 Feb - 15 Mar 2018

President of the Federal Republic of Germany, Dr. Frank-Walter Steinmeier calling on President, Ram Nath Kovind at Rashtrapati Bhavan in New Delhi