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EU leaders draw up battle traces for post-Brexit price range

BRUSSELS (Reuters) – European Union leaders staked out opening positions on Friday for a battle over EU budgets that many conceded they’re unlikely to resolve earlier than Britain leaves subsequent 12 months, blowing a gap in Brussels’ funds.

At a summit to launch dialogue on the dimensions and form of a seven-year price range package deal to run from 2021, ex-communist states urged wealthier neighbours to plug an almost 10 p.c annual income hole being left by Britain, whereas the Dutch led a bunch of small, wealthy international locations refusing to chip in any extra to the EU.

Germany and France, the most important economies and the bloc’s driving duo as Britain prepares to depart in March 2019, renewed presents to extend their very own contributions, although each set out situations for that, together with new priorities and fewer waste.

Underlining divide between east and west runs deeper than cash, French President Emmanuel Macron criticised what he mentioned have been poor international locations abusing EU funds designed to slender the hole in dwelling requirements after the Cold War to shore up their very own recognition whereas ignoring EU values on civil rights or to undercut Western economies by slashing tax and labour guidelines.

Noting the historical past of EU “cohesion” and different funding for poor areas as a instrument of financial “convergence”, Macron advised reporters: “I will reject a European budget which is used to finance divergence, on tax, on labour or on values.”

Poland and Hungary, heavyweights among the many ex-communist states which joined the EU this century, are run by right-wing governments at daggers drawn with Brussels over their efforts to affect courts, media and different unbiased establishments.

The European Commission, the chief which is able to suggest an in depth price range in May, has mentioned it would purpose to fulfill requires “conditionality” that can hyperlink getting some EU funding to assembly treaty commitments on democratic requirements corresponding to correctly functioning courts in a position to settle financial disputes.

But its president, Jean-Claude Juncker, warned on Friday in opposition to deepening “the rift between east and west” and a few within the poorer nations see complaints about authoritarian tendencies as a handy excuse to keep away from paying in additional to Brussels.

At round 140 billion euros ($170 billion) a 12 months, the EU price range represents nearly 1 p.c of financial output within the bloc or some 2 p.c of public spending, however for all that it stays one of many bloodiest topics of debate for members.

“WON‘T PAY”

The Commission has recommended that the following package deal must be elevated by about 10 p.c however there was little signal on Friday that the governments with money are prepared to pay that.

Belgian Prime Minister Charles Michel sits between French President Emmanuel Macron and Germany’s Chancellor Angela Merkel throughout a dinner with European Union leaders at Val Duchesse citadel in Brussels, Belgium, February 22, 2018. Chancellerie du Premier ministre/Belgian Prime Minister Office/Handout by way of REUTERS

“When the UK leaves the EU, then that part of the budget should drop out,” mentioned Dutch Prime Minister Mark Rutte, who leads a bunch of hawks together with Sweden, Denmark and Austria.

“In any case, we do not want our contribution to rise and we want modernisation,” he added, saying that meant reconsidering the EU’s main spending on agriculture and regional cohesion as a way to do extra in defence, analysis and controlling migration.

On the opposite facet, Czech Prime Minister Andrej Babis mentioned his priorities have been “sufficient financing of cohesion policy” a great deal for companies from the EU’s agricultural subsidies.

German Chancellor Angela Merkel mentioned there had been broad settlement that new priorities corresponding to in defence, migration and analysis ought to get new funding and she or he known as for a “debureaucratisation” of conventional EU spending programmes.

Summit chair Donald Tusk praised the 27 leaders — Prime Minister Theresa May was not invited as Britain will have left earlier than the brand new price range spherical begins — for approaching the problem “with open minds, rather than red lines”. But regardless of all of them wanting to hurry up the method, a deal this 12 months was unlikely.

Although all agree it will be good to keep away from a repeat of the 11th-hour wrangling forward of the 2014-20 package deal, many sounded uncertain of a fast deal even early subsequent 12 months.

“It could go on for ages,” Rutte mentioned. He added that it will be “nice” to complete by the May 2019 EU election: “But that’s very tight.”

Among the touchiest topics shall be accounting for the mass arrival of asylum-seekers in recent times. Aggrieved that some jap states refuse to absorb primarily Muslim migrants, some within the west have recommended penalising them by way of the EU price range.

Merkel has proposed that areas that are taking in and attempting to combine refugees ought to have that rewarded within the allocation of EU funding — a much less clearly penal strategy however one which she needed to defend on Friday in opposition to criticism within the east. It was not meant as a menace, the chancellor insisted.

In different business at a summit which reached no formal authorized conclusions, leaders broadly agreed on some points referring to subsequent 12 months’s elections to the European Parliament and to the accompanying appointment of a brand new Commission for 5 years.

They pushed again in opposition to efforts, notably from lawmakers, to restrict their selection of nominee to succeed Juncker to a candidate who leads one of many pan-EU events within the May 2019 vote. They accepted Parliament’s plan to reallocate some British seats and to chop others altogether and in addition, barring Hungary, agreed to a Macron proposal to launch “consultations” with their residents this 12 months on what they need from the EU.

($1 = zero.8131 euros)

Additional reporting by Philip Blenkinsop, Robert-Jan Bartunek, Alissa de Carbonnel, Robert Muller, Peter Maushagen, Andreas Rinke, Alastair Macdonald, Samantha Koester and Francesco Guarascio; Writing by Alastair Macdonald

Our Standards:The Thomson Reuters Trust Principles.

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