European pratictioner and researcher

 

The first challenge for EU Leaders is to handle with care the UK exit from the EU. It will be a very complex operation which could also be the motor and stimulate further reforms of the EU.

 

The official statements, so far, tell us that there will be no impact for UK for the next two years, after the triggering of the TFEU art. 50. This is formally true but the reality seems to be more complicate. The commitments taken by EU (at 28) will have an impact of disbursements well beyond the likely exit and a number of questions should be clarified, possibly at the beginning of the negotiations. For instance, will the UK government commit to honour the payments on commitments made on previous budgets as well as the ones of 2018 or 2019? Or should the 27 Member States assume the payments for commitments made at 28 MS? Same situation for the British EU staff, in theory, they benefit of a life contract with the EU, which entitles them to pension rights, whose effects will last for decades. How far will the UK contribute to these expenditures? Will EU take new commitments, in particular in favour of UK beneficiaries in the coming months and weeks without having solved the payments to be done after Brexit?

 

This is probably only one of the problems to be settled in negotiations. In any case, EU budget will lose the UK contribution[1]. The UK contributes about 10% of the Member States financing of the EU budget (about 10 bn Euros) and it is net contributors by about 4,9 bn (in 2014)[2], this gap, rebus sic stantibus, should be filled in by the other MS or EU contribution should be downgraded for some policies. Another negotiation ahead for the 27. Even in this case, the situation could be complicated by the likely UK participation to some of EU policies (i.e. CFSP, Environment…..) through the European Economic Area or other special arrangements which could be negotiated by then.

 

On the own resources side, the Brexit will automatically scrape all correction mechanisms, with a relief especially for the countries financing the double rebates. The current own resources system will become fairer as financed by pure GNI contributions.

The absence of the UK might also stimulate the creation of EU taxation to replace the current system of financing, opening a supplementary window opportunity for the outcome of the Monti group.

 

The multiannual financial planning has always been the place for negotiating the reform for a budget less redistributive and more oriented to investments. UK has always been on the lead in this battle[3], with some (modest) success. The absence of the UK leader at the European Council risks to reduce the impact of the forces aiming to reform the budget, unless EU Leaders find other motivations for the reform.

[1] House of Commons EU budget and the UK’s contribution, June 2016,

http://researchbriefings.parliament.uk/ResearchBriefing/Summary/SN06455

[2] European Commission EU Expenditure and revenue 2014-2020:

http://ec.europa.eu/budget/figures/interactive/index_en.cfm

[3] T. Blair, speech to the European Parliament, 22 June 2005, opening the UK Presidency of the EU. http://www.theguardian.com/politics/2005/jun/23/speeches.eu

Author :
Print

Leave a Reply