EU on brink of huge split as members demand major concessions on booming budget plans

The European Union has been fending off demands from net contributors to the common budget to keep contributions to a stable one percent of the Gross National Income (GNI) over the next seven years. The “Frugal Four” – a union comprising of Austria, The Netherlands, Sweden and Denmark – have opposed proposals from the European Commission to increase contributions to the budget and called for the bloc to agree to a discount for those countries paying into the common pot more than others. Speaking to Euronews, Austria’s European Affairs Minister Karoline Edtstadler said: “The rebate is an absolute preliminary measure for Austria.

“It would compensate for the gap between our financial contribution and the lower yield.”

Ms Edstadler added: “Austria has become the third-largest net contributor, we must try to bridge the gap and that’s why we ask for a substantial discount for Austria.”

Under the Commission’s latest masterplan, key net contributors could see their annual MFF bill increase dramatically between 2020 and 2027.

The Netherlands and Austria would see their contributions double to €8billion (£6.7billion) and €2billion (£1.7billion) respectively.

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In addition to paying more to invest in the EU’s “new priorities”, some EU states could see the cost of membership increase to cover for the gap Britain left in the common pot with its departure in January.

European Parliament President David Sassoli admitted on Wednesday Brussels is £191bn (€230bn) short in its first budget since Brexit.

Estimates from former EU Budget Commissioner Günther Oettinger show Britain’s departure will result in a budgetary vacuum worth £9.9bn (€12bn) to £12.5bn (€15bn) over the next seven years.

To make up for the losses, the European Commission and the European Council have been pushing members to increase contributions to 1.11 percent of their GNI.

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Angela Merkel urged other members of the bloc to reach a compromise but Germany’s Finance Minister Olaf Scholz branded the current proposal “unacceptable”.

A spokesman for Chancellor Merkel said in order to reach an agreement it “will require a willingness from all sides to compromise”.

He added: “Our goal has always been that this budget will also support a process of modernisation.”

Emmanuel Macron rejected calls from the Frugal Four to agree to a rebate for the largest net-contributors to the budget, arguing the mechanism should no longer be in use now the UK is not a member anymore.


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Margaret Thatcher ensured part of the annual contribution the UK paid into the budget would be returned to Britain in the 1980s, with the country being the only EU member benefitting from a similar mechanism.

But Mr Macron and at least 16 other member states are arguing that with the UK rebate gone, all rebates should be gone.

French EU Affairs Minister Amélie de Montchalin said: “We go with the president in these debates in a fairly offensive manner — we will not accept an agreement that would cut Europe off.

“France is not ready to put more money on the table to indefinitely give it to its neighbours.

“We can’t just be part of a system where we write cheques to each other, as Margaret Thatcher used to say.”

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