Brexit means ‘small’ budget cuts, says EU’s Oettinger

The UK currently contributes between €10-12 billion a year to the EU’s budget.

The U.K.’s departure from the European Union will force “small cuts” to the bloc’s budget from 2019, European Commission budget chief Günther Oettinger said on Thursday, signalling that farm subsidies won’t be immune.

“At the moment, I don’t want to rule out cuts in any program,” the commissioner for budget and human resources said in an interview with POLITICO.

“I want to save as little as possible on research and I do not want to damage the two big programs — farming and cohesion. There, I think small annual cuts of single-figure billions a year are reasonable,” Oettinger said, pointing to the U.K.’s annual contribution of between €10 and €12 billion euros a year to the EU’s budget.

Although the impact of Brexit will not be felt on the budget until 2019, the commissioner confirmed discussions are already under way about how to fill the shortfall left by the U.K.’s departure. The Council of the EU agreed Wednesday to its budget position for 2018, worth €158.9 billion.

Oettinger, who said he spends “three or four hours” on Brexit each week, confirmed that negotiations with the U.K. on its departure bill — estimated to be around €60 billion — would begin next week.

By the middle of next year, the Commission will publish a proposal regarding the EU’s trillion dollar budget plans for the next financing period that begins in 2020.

“We have new challenges and we cannot brutally cut programs,” the commissioner said, flagging challenges posed by the migration crisis as well as longer term infrastructure projects.

While he didn’t give specific details, he suggested they might be “a middle way” involving some cuts to the budget, for example to the Common Agricultural Policy, and a “little more money” from the remaining EU27.

“Where we foresee cuts, we will be very careful with them,” he added.

When asked whether the Commission was considering the introduction of conditions to receiving EU funds in response to countries like Hungary and Poland introducing initiatives alleged to be undermining the rule of law, Oettinger said he didn’t want to talk about individual countries but acknowledged it was “an interesting question.” Even so, he said “this could be one condition to get funds.”

He also took the opportunity to criticize local politicians who take EU funds without giving the EU credit. “Often, the regional politicians are not willing to praise Europe. They take the money from Brussels, invest it, and say ‘hey, look what I’ve done …'” he said.

Karl-Heinz Lambertz, who chairs the Committee of the Regions — an EU body representing about 280 regions, such as the 16 German Bundesländer or, in his case, the German community in Belgium — said in the joint interview with Oettinger that such conditionality “could impact the wrong people” and have “horrible political effects.”

“Cynics, who are sometimes at large, stand before their people and say ‘Look what those people in Brussels are doing to you.’ That would lead to even more skepticism,” said Lambertz.

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