EU panic: Brussels fears UK won’t pay full Brexit bill – capitals asked to plug black hole

We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.

EU budget commissioner Johannes Hahn said member states should be prepared to hand over more cash in case Britain doesn’t pay its full Brexit bill. The UK left the EU at the end of January, but agreed to continue paying towards various financial obligations that the country agreed to while still a member. The Office of Budget Responsibility estimated the total financial settlement to be worth £32.9 billion when the UK left the EU on January 31.

Eurocrats have warned of a vast black hole left in the EU’s budget as a result of the UK’s departure.

Officials have predicted around a €60-75 billion gap in the EU’s next seven-year budget because of Brexit.

EU law states that governments can be asked to make a maximum national contribution to the bloc’s coffers of 1.2 percent of gross national income.

But the European Commission has called for a higher ceiling to help repay a proposed €750 billion coronavirus recovery fund, which will see the Brussels-based executive borrow on international markets to raise the cash.

Mr Hahn said: “Our proposal is to increase the ceiling to 1.4 percent of GNI on a permanent basis in order to serve the repayments, but also in case there is an issue concerning Brexit to be prepared for.”

He added: “In case of hard Brexit, if they don’t pay what they promised to pay, it is sound financial management on our side.”

The fears come despite numerous promises from Downing Street that it will fulfil all of its obligations agreed in the EU Withdrawal Agreement.

The budget chief said the Commission could even propose that member states make national contributions of up to two percent.

But this could come in the form of a guarantee, which means actual contributions would be less than Brussels’ demands.

Mr Hahn said: “Then on top of it, to borrow the necessary amount on the market, we want to increase the headroom by another 0.6 percent, so to two percent of GNI until the end of the repayment period.”

The Commission wants to repay all of the bonds by 2058.

MUST READ: Politicians fury over ‘despicable’ attempt to delay Brexit for years

Ursula von der Leyen, the Commission’s president, wants to borrow against the security of increased EU government guarantees for the 2021-2027 budget.

The German’s blueprint, which also involves handing eurocrats unprecedented taxation powers, is due to be debated by EU leaders at a summit on June 19.

In order to implement the recovery fund, the Commission will need to secure the unanimous backing of the EU27.

Ireland PANIC: Dublin admit UK won’t back down on Brexit [INSIGHT]
Pound to euro exchange rate: GBP ‘treads water’ against the euro [FORECAST]
‘Huge opportunity’ to grow UK space industry after Brexit [EXCLUSIVE]

Mrs von der Leyen has urged capitals to put their “prejudices” aside and back the plan.

“The crisis can’t be fixed by any country alone. This is Europe’s moment,” she told the European Parliament.

“Let’s us put aside the old prejudices.”

Source: Read Full Article