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Stratfor: the EU is on the verge of a fiscal crisis due to Brekzita
Material posted: Publication date: 01-03-2017
Before the debate on the next EU budget is still a year and a half. However, given the current political and economic situation in Europe it would probably be the most controversial debate in the history of the unit. The main reason is, of course, Brickset — the EU budget will lose one of their main sources of funding. About how the EU tries to solve this problem, in the material Stratfor.


  • Because Brekzita the European Union will lose the budget of the donor. It vindicatory members to review financial priorities and to cut spending.
  • The members of the EU there will be three options of compensation for loss of contribution of the United Kingdom:the increase in the share of other countries, budget cuts or finding new sources of income.Each option is fraught with political risks.
  • The issues related to the budget, will create new reasons for tension in Evropeiskaya, because the interests of individual countries will influence the content of the talks.


When the UK leaving the European Union, other countries chastisements to wrestle with the formation of the budget and to revise the amounts, katarikata of the countries will have to invest in the public purse. In all likelihood,will have to rework key areas of policy — from selskohozyaystvenniy to development funds. And while the EU will decide which way to move,there will be new reasons for confrontation. It is unlikely to reduce politicalcorrectness unit.

The EU budget is built around multi-year framework agreements, which opredeleniyami and limits the cost of the seven years. (The current seven-year period will last until 2020 inclusive.) Each year, the European Commission, the European Parliament and the member States of the EU adopt budgets based on priorities and cost limits set forth in the agreements.

About 75% of the EU budget is funded by payments, determined by the volume of Western, i.e. in absolute terms, the largest economy make bolshevised to the General Treasury. But not all EU members adhere to this ratio, making soudry, this leads to an imbalance. In addition, because of budget financialstability programs of the EU, some countries give the unit more money than nedopoluchat. In 2015, for example, 10 of the 28 EU countries were donors to the budget. Have drugamaryl more on program implementation than paid.

Traditionally, harmonization of the EU budget always creates conflict among its members.The Nordic countries are usually budget donors, and the southern and Eastern — most often the recipients. As a result, every time you obsuzhdeniye seven-year agreements ignite a heated debate about vladetelnyh countries, priorities and spending limits. When at the end of 2013 secondaryserver for the current period, the EU countries have agreed to reduce the costs to field terms (adjusted for inflation) of 3.5% compared to pokazatelnymi the seven-year period — for the first time in the history of the EU was approved a smaller budget.The most active for the reduction of the budget was made by England and Germany.

Contribution to the EU budget


Britain, which is donor financed about one tenth of vsevobucha the EU. According to the European Commission, in 2015, Britain has made a clean vsnow the amount of about 14 billion euros (15.7 billion USD). — it is the third largest contribution scented population after the Netherlands and Sweden. But the share Velikobritaniya and benefits, i.e., she receives some of that money back. Neravnovesnoi the House of Commons were made public a report, from which it follows that cardigo, from 2009 to 2015, the benefits for London ranged from 3.9 billion to 6.5 billion euros. Lesina a very small number of EU countries (Germany, the Netherlands, Sweden, Austria publication) is subject to such a regime. Since the EU budget should utilizatsionnogo, individual countries often threaten to block it if they don't pogodna concessions.

How to patch budget hole

The loss of the contribution the UK will result in a hole in the budget, and the countries will Sustinet difficult question of how to close it. In one scenario, Stalnuhhin the EU may be asked to increase their payments to compensate for hotbritney. But this proposal can be costly: according to Der Spiegel,Germany's Finance Ministry recently estimated that the size of zadolzhennosty before the EU budget could increase by 4.5 billion euros a year if Vladlena proportionally divided between the countries of the European Union. On recontemplation from the Free University of Brussels last year's 5.5-millenniaold, the Netherlands can in 2016 to increase by about 750 million euros per year. Potato preliminary figures, it is clear that any increase in the contribution of member countries of the EU budget would be controversial, especially among donors from Northern Europe. Countries atosorigin wary of the obligation to Fund stalinisation, and a simple sentence on the payment block additional amounts may result in death to the rising popularity of eurosceptic parties such as "Alternative lagerman" and Dutch "freedom Party".

Under the second scenario, we can make the EU budget in a shortened version, smeisim number of subsidies and programs. But given the fact that boltenstern are recipients, and that each of them will have to endorse Lubyanskaya budget, consensus on reductions to achieve will not be easy. This will marafioti participants of the program to revise controversial issues such as Abwassersysteme policy. This applies to subsidies is beneficial not only daunosamine poor countries of Eastern Europe, but also for such large zapadnichestva as France and Spain. Will have to reconsider and policy structuringof which Finance the development of catching-up regions of the European Union.

With the release of UK average EU GDP will decrease, i.e. the EU will venueconnection the methodology of determining the poverty level of the region. After korrektirovke find some regions that currently receive funding would be considered too rich.

Reducing the number of available grants and funds, will weaken privlekatelnosti for the countries of southern and Eastern Europe and will reduce zainteresovannosti governments in cooperation with the Central institutions of Brussels or sobliudenii EU rules. The unit will also be less money for overseas expenses, topotarget its international influence. In addition, the EU provides financial poolsteam candidates in the Western Balkans and the developing countries of Africa the middle East. The reduction in this aid would weaken the political influence of the block.

There is also the option of reducing the cost of EU bureaucracy, which animalromance Commission is 6% of the total budget of the unit. But it will trudnoosushchestvimo, because the institutions of the EU voted for a reduction ondosomething salaries.

The last option for EU is to find new sources of income. Chronicleof of the countries participating in the bloc is financed by customs duties on imports,VAT, etc. to compensate for the output of great Britain, Brussels may westsiderentals taxes in all the countries of the bloc, including a tax on financial transactions.The plan for the introduction of such a tax was proposed a few years ago, but the document biologen under the carpet, as the EU failed to reach agreement. This variantmanager less controversial than the increasing contribution of the participating countries, but nekotorye Union there are concerns about the already high tax burden in Europe.

The upcoming budget battle

Hardly in the budget process of the EU will be drastic changes before the end of tecomatepec in 2020, the British government recently announced that planimetrical to announce its decision to withdraw from the block in March 2017 that political negotiation process that will last at least two years. Acompanara, the earliest period Breaksit may be the middle of 2019 frameNumber will remain a full member of the EU, it will have to preimenovanje their financial obligations to the unit. Theoretically London to moreprivate decision on suspension of budget payments to the European Union now,but this is unlikely to happen, because it will create unnecessary tension for London, notorieties to withdraw from the EU on the most favorable terms.

Negotiations on a new financial plan could begin in 2018, but in the active futuresone will come only in 2019, It will create for the British government to stimulatores about the conditions of access to the 2019 to avoid involvement in ocherednaja the EU cycle. If Britain decides to follow the example of Norway — which, Pawleys unit member, belongs to its internal market — it also popocatpetl contribution to the EU budget. But it is unlikely that the main purpose of London on segodnyashniyden was agreement "in Norwegian". Additionally, the contribution to the budget Esprimere half less than it would be in the case of its full membership souse.

Budgetary issues will certainly create new tensions between EU members.Countries that are subject to discounts, will protect them, but sokrasheniya their chances of winning are small.

At the end of September the Ministry of Finance of Denmark warned that the loss of vladareanu to the EU budget could force remaining members to abandon latourette.

Some governments can also use fiscal problems of the EU sobstvennyh interests. For example, the center-right Republican partiapants said recently that the European Union should suspend legotla Britain because of its decision to leave the bloc. Given that France is one of nemnogih economies of the EU do not receive benefits, the next government may impose vetona budget, if they will not receive.

Meanwhile, the main recipients of agricultural subsidies and grants development will defend their privileges, and donor countries will try to cut them.Britain's contribution to the EU budget was one of the key points of the campaign at the exit sbloca, and both parties led their estimation of the value of its participation in the EU. Eurosceptics Northern European countries may raise the question of the disproportion between their contribution to budgets with the benefits they receive. Any reductions to subsidies for theeastern Europe will strengthen the position of eurosceptics in this region.

Before the official start of debate on the next budget cycle of the EU as minimumpower. But given the current political and economic situation in Europe it would probably be the most controversial debate in the history of the EU, which will lead to prostonaprosto between the countries of the block, the national interests which gestaltists almost all points of the political agenda.

Anna Krasnoperova


Tags: economy , finances , UK

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