Brexit Badly Hurts The European Budget

Brexit update: The exit is only the beginningThe UK exit from the EU will take effect on 31 January

JP Marín-Arrese| Those betting Brexit would take a heavy toll on Britain, discover much to their surprise that the EU stands as the first collateral casualty. The vacuum left in the budget by the UK departure has fuelled bitter acrimony between the Member States, especially in those receiving large amounts of Community money, like Spain. Its PM Sánchez has described the proposal tabled by the Council Chair as deeply disappointing. No wonder, as it trims farmers’ subsidies to the bone while massively reducing the cohesion funds.

Let’s face it. Most northern countries are adamant in preserving their own pay-back scheme set under the umbrella of the British cheque. For many years, people used to accuse London of blackmailing the EU with constant demands to reduce their fiscal balance. Little did they care about similar arrangements benefitting Germany, the Netherlands, Sweden, Austria and Denmark.

These significant contributors follow the British steps in refusing to give up their arrangements. As a precautionary measure, they flatly discard going beyond the 1% GDP barrier for the budget envelope.

Did the Brits have a point in complaining about their excessive burden share? It seems so.

About the Author

JP Marin Arrese
Juan Pedro Marín Arrese is a Madrid-based economic analyst and observer. He regularly publishes articles in the Spanish leading financial newspaper 'Expansión'.