WORLD

Germany in panic as they are told to double payments to EU

30 October, 2019
David Clews
The German Government faces having to hand over as much £28.5 billion, according to the latest government estimates in order to plug the potential hole created by Brexit. The Brussels’ plan has sparked fury in the German capital and four other rich governments who also face massive hikes in their budget contributions. Germany could be hit by a steep 100 percent rise – from £13 billion in 2020 to £28.5 billion by 2027 – whereas the Netherlands only faces a 50 percent increase.
Under the plans, France faces a less steep increase in its net contributions – rising from around £6.4 in 2020 billion to £8.6 billion in 2027.

France would also benefit from Brussels scrapping rebates because Paris is largely forced to foot the bill through a so-called “correction mechanism’, which was established by Margaret Thatcher to limit UK farming subsidies to the EU 35 years ago.

Angela Merkel last week told EU27 leaders at a summit in Brussels that the European Commission’s plan would mean Germany would become the biggest per capital contributor to the bloc’s budget.

The German finance ministry said: “Due to Brexit and the Commission’s proposal to abolish permanent rebate, the financing burden on German would disproportionately rise, in comparison to other member states.”
Eurocrats want to increase the size of the bloc’s long-term budget to 1.11 percent of the EU’s gross national income to help fill the void left by the UK.

Work on the next budget, which runs from 2021 to 2027, is set to go into overdrive as diplomats and officials attempt to sign off the package in the coming months.

Germany, the Netherlands, Austria, Denmark and Sweden are all set to rebel against the proposals and demand that contributions of just one percent of gross national income and permanent rebates must continue after Brexit.

The so-called “frugal five” are all net contributors to the bloc’s budgets, meaning they pay more in than they receive back.

Britain is the second biggest net contributor to the EU budget and Brexit will leave a £10 billion blackhole in the bloc’s finances.

Senior eurocrats have previously warned that Brussels has no “plan B” to plug the extraordinary gap left by the UK.

The European Commission has yet to officially calculate the rise in net contributions of member states, according to a spokeswoman.

She added that the five rebate countries were “paying a lower share of their income to the EU budget than the other member states, despite being among the top eight EU countries in terms of relative prosperity”.

European Union budget

Under the plans, France faces a less steep increase in its net contributions – rising from around £6.4 in 2020 billion to £8.6 billion in 2027.

France would also benefit from Brussels scrapping rebates because Paris is largely forced to foot the bill through a so-called “correction mechanism’, which was established by Margaret Thatcher to limit UK farming subsidies to the EU 35 years ago.

In a sign of further power struggle between Paris and Berlin, Mrs Merkel said Germany would block any budget deal that does not contain the rebate.

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