EU leaders to debate over post-Brexit monetary challenges in Brussels

The leaders of the European Union will debate over the next budget of 2021-2027 this week as Britain leaves the 27-nation bloc. After the Brexit, UK has created an $81 billion hole in the EU's finances while it faces expensive challenges to become carbon neutral by 2050. In the next seven years, as the Union tries to stump up, the budget is the most essential key areas in which the members shall focus. 

According to international reports, in the coming seven-year cycle, the starting point of the talks is 1.074 per cent of the European Union's gross national income. By contrast, EU national budgets claw in 47 per cent of annual output on average. However, still, the disputes remain over hundredths of percentage points which have kept the EU officials busy in the last two years. Media reports also state that many diplomats remain doubtful if a deal will be reached on February 20 and February 21 when the leaders meet in Brussels. 

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'Complex and complicated' summit

International media reports also stated that Italian Prime Minister Giuseppe Conte said that the summit in Brussels is “complex and complicated” because the proposal has not met with the expectations of the EU members. The budget of the 27-nation-bloc receives money from customs duties on goods which enter the single market, a reduction in sales tax, antitrust fines imposed by the EU on the companies, as well as the national contributions. 

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Further, the EU spends its money on subsidies for the farmers in the union, and on equalizing living standards across the 27-nation-bloc, border management, research, security, and various non-EU aid programs. Meanwhile, some of the net contributors, also called the 'frugal four' of the Netherlands, Austria, Sweden, and Denmark reportedly want to limit the budget to one per cent GNI. However, Germany, which is also the biggest contributor is gearing up to prepare for a greater GNI of 1.07 per cent, which is reportedly too high for Berlin. 

“The financial burden of the union is increasingly being put on the shoulders of a small number of member states, including ours," the frugal four wrote. 

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(With inputs from agencies)