EU leaders at odds over budget size

EU leaders have begun talks on a joint 2021-2027 budget that will need to fill a €75bn hole left by Britain's departure just as they face costly climate and other challenges.

EU leaders at odds over budget size

By Michel Rose and Francesco Guarascio

EU leaders have begun talks on a joint 2021-2027 budget that will need to fill a €75bn hole left by Britain's departure just as they face costly climate and other challenges.

The joint budget is the most tangible expression of the main topics EU states want to focus on over the next seven years and their willingness to stump up cash for them, but divisions were evident even before the two days of talks got going.

The 27-member bloc wants to spend more on climate, migration, digitalisation and security but net contributors refuse to pay more, and beneficiaries want to retain the support they get for farming and development.

"I hope that we make sizeable progress... It's a complicated task and certainly big differences have to be overcome," German Chancellor Angela Merkel said.

The starting point for discussions on the size of the budget is 1.074% of the bloc's gross national income (GNI) or €1.09 trillion.

While only a fraction of member states' national budgets, it is still seen as far too much by some and far too little by others, making it more likely that leaders will move closer to an agreement over the next two days rather than clinch a full deal.

"It would be unacceptable to have a Europe that compensates for the departure of the British by reducing its own means," French President Emmanuel Macron said. "I will take the time needed to reach an ambitious agreement. This could take several hours, several nights, several days."

The EU budget gets money from customs duties on goods entering its single market, a cut of sales tax, antitrust fines imposed by the EU on companies, and from national contributions.

The Netherlands, Austria, Sweden and Denmark want to limit the budget to 1% of GNI. Germany, the biggest contributor, is prepared to accept a bit more, but 1.07% is too high for Berlin. The European Commission, the bloc's executive arm, wants 1.1% and the European Parliament pushes for 1.3%.

- Reuters

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