European Commission Looks At The Impact Brexit Will Have On Funding

With the UK due to vote on the final Brexit bill, the European Commission is starting to take a look at the impact it will have on the overall EU budget, and claims that cuts to spending could be very damaging to the remaining countries. Cutting the budget post-Brexit to the UK’s contribution share of 14.55% would, according to a study by the Commissions regional affairs department, mean an end to funding to Western European countries from the regional aid program.

If cuts were to take place, the EU would no longer be able to support these countries, and instead would provide support for less developed regions only,” Meaning that only states with a GDP per capita of 75% or less would receive funding and that  “Support for Germany and mainland France would be discontinued.”

Eastern European countries, Greece, Portugal, Cyprus, and Southern regions of Spain and Italy would still receive access to “cohesion funds”, but Scandinavian countries, Austria and Ireland would be among countries that would no longer be entitled to support under the scheme.

The department for regional and urban policy is looking into the effects of cutting either 15% or 30% of its budget, as well as continuing the with the current budget increases which would allow nations to redistribute their own money to poorer regions of the country. The radical cuts of 30% would mean an end to funding for developed nations.

The president of the EU’s Committee of the Regions Karl-Heinz Lambertz said that “There are economic, social and territorial disparities in all EU regions. For that reason solidarity cannot be limited to only few regions, because there are people needing European intervention to provide jobs, training, broadband or public infrastructures everywhere. Cohesion in economic and social affairs is a founding objective of our European Union. The money used “is only 0.37 percent of the EU’s GDP. Let’s not undermine this effective policy.”

With Germany being the biggest contributor of funding, and one of the strongest allies to Eastern and Southern Europe, the German government is keen to avoid picking up an even bigger share of the bill post-Brexit.  A recent German position paper called for reforms to economic policies, and also claimed that “Cuts will affect the future MFF [multiannual financial framework] and its expenditures as a whole”

The Commission must make a decision by next year, which is when the next seven year budget is due, and calls are being made that policies should “contribute to sound economic governance”, and that the “cohesion policy makes an important contribution to the implementation of economic reforms.”

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