Jean-Claude Juncker will have to deal with a budget deficit when Britain withdraws its contributions
The Jacques Delors Institute’s research has claimed that there is “no easy way to fill the Brexit gap” and that Brussels officials should prepare for a big shock.
Britain – one of the biggest financial contributors to the failing EU project – will leave a gaping hole in the finances of Brussels officials and it remains unclear how the bloc intends to cope with the shock.
Although much is still uncertain, it is clear that Brexit will deal a shock to the EU budget
The Jacques Delors Institute report
EU member states will be forced to either increase expenditure into the project, slash the budget, or work out a combination of the two, according to the report.
The Jacques Delors Institute – named after Thatcher’s fiercely pro-EU nemesis and former president of the European Commission – found Britain contributed £8.6billion of the £119billion budget each year, more than 10 per cent of the total fund.
JACQUES DELORS INSTITUTE
Projections from the Jacques Delors Institute
The paper warns: "Although much is still uncertain, it is clear that Brexit will deal a shock to the EU budget.
“There is no easy way to fill the ‘Brexit gap’ of around €10billion per year, especially because a unanimous decision is required to do so and neither contribution increases or budget cuts will be palatable to all member states.”
Estimates from the Institute claim the EU could be left with a Brexit budget gap of between €5 to €17 billion-per-year, depending on the variables of what type of deal is struck.
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If the EU decides to push ahead with the £8.6billion spending cuts – the size of Britain’s contribution – it represents the entire budget for European foreign policy, EU’s action on immigration, consumer protection, and culture.
The spending cut equates to the entire EU research framework plus the Asylum, Migration and Integration Fund (AMIF).
AMIF helps “promote the efficient management of migration flows and the implementation, strengthening and development of a common Union approach to asylum and immigration”.
How much each nation pays into the EU is calculated as a percentage of gross national income and a proportion of customs duties and VAT revenue.
Theresa May promised Britain would withdraw from the single market in a speech earlier this week
Britain has paid more into the EU than fellow member nations because the UK’s economy has grown faster than its counterparts.
The report provided estimates for how much money the EU would need plug if Britain opted for a soft Brexit – a proposal Theresa May rubbished earlier this week.