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EU Economics

Biggest Brexit LOSERS: Shock charts show which EU states will suffer most from budget hole

EUROCRATS have produced a shock report showing which EU member states stand to pay more and lose the most when Brexit blows a £9 billion hole in the bloc’s budget.

By NICK GUTTERIDGE, BRUSSELS CORRESPONDENT

The EU Parliament has calculated the enormous potential costs facing all 27 countries once the UK’s contribution to the Common Agricultural Policy (CAP) expires in 2020.European leaders will have to decide whether to maintain the bloated scheme’s current spending levels, which account for 40 per cent of the bloc’s budget, or trim it down to size.

That presents them with a political nightmare, because wealthier member states want to use Brexit to slash waste whilst big recipients will fight tooth and nail to maintain the status quo.

Now a report, drawn up by the officials for the EU Parliament’s agriculture committee, will add fuel to the fire by detailing precisely what each country has to lose.

Angela MerkelGETTY

EU Parliament charts show the biggest losers from Brexit


It puts the budget hole facing the CAP scheme at around £2.7 billion a year – a sum that will have to be covered either by cutting subsidies or asking member states to stump up more cash.Eurocrats have already indicated their willingness to fight for the latter, whilst MEPs have previously voted down and suggestions that farming payments should be reduced.

Budget chief Gunther Oettinger recently said: “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.”

However, the EU Parliament report says increasing member state contributions, which are based on Gross National Income (GNI), will disproportionately hit wealthier member states.

The EU Parliament chartsEU Parliament

The shock charts show how much each country has to lose from Brexit


The EU Parliament chartsEU Parliament

Rich countries have the most to lose if CAP spending is not cut


To make matters even more complex, such a move would particularly affect three of the EU countries which are currently facing a pressing threat from the rise of euroscepticism and populism.The report states: “Adjusting to the ‘CAP gap’ through higher contributions leads to a worsening net balance in all Member States. However, not all are equally affected.

“According to our calculations, an increase in contributions disproportionally affects some of the EU’s largest net contributors such as Germany, The Netherlands and Sweden.

“Higher contributions magnify the already existing imbalance between CAP net contributors and net recipients.

“Whether this represents an unfair additional burden for the former rebate countries or whether today’s financing system is unfair to most Member States, is up for debate.”

The EU Parliament chartsEU Parliament

Germany is currently the biggest contributor to the CAP scheme


 There’s not one word being said about reducing the budget and reducing the costs

Swedish MEP Peter Lundgren

The report says under this scenario the tiny Netherlands, population 17 million, would see its CAP net balance deteriorate by almost the same amount as Italy, a country whose population and GNI is three times larger.Meanwhile Germany would see its CAP net balance deteriorate to an astonishing £5.4 billion and even France, traditionally seen as the biggest beneficiary of the farming scheme, would end up with a £1 billion Cap deficit.

However, those member states which have smaller economies and receive bigger amounts of cash have the most to gain including Poland, whose massive £2.7 billion net balance would remain almost unchanged.

Swedish MEP Peter Lundgren, whose country will be one of the worst affected by the CAP changes, said Brussels should be prepared to scrap the farming scheme altogether and hand power back to individual member states.

He told express.co.uk: “Sweden is a small country and we have a very specific farming situation – we have long winters and we have a much stronger legislation than most of the rest of Europe.

“When we give taxpayers’ money to the EU and they allocate it out in the CAP, then we’re actually paying farmers in other countries to out compete our own. So it’s really bad for Sweden and it will only cost us more money.”

Swedish MEP Peter LundgrenEXPRESS

Swedish MEP Peter Lundgren


He proposed: “For me the best thing would be just to scrap it and let every member have its own agriculture policy that takes into effect the specific climatic situation. That’s my dream but of course that won’t happen.“The problem now I see with the direction the decisions are heading in is there’s not one word being said about reducing the budget and reducing the costs. There’s never been a discussion about that.

“They are constantly looking for the possibilities to cover up for the loss they will see after Brexit, whether by introducing direct taxes on EU citizens or increasing member states’ contributions.”

Under a second scenario the Brexit gap could be filled by simply slashing £3.7 billion a year from the CAP budget – but this would adversely affect Eastern European states already at loggerheads with Brussels.

The report says such a cut would reduce Polish and Greek net gains by £204 million and £124 million a year respectively, whilst some contributors like Luxembourg and Belgium would see small gains.

However, officials warn that even in this scenario most countries “are still negatively affected” and that “the higher the amount a country receives at the moment, the larger the negative effect”.And if EU leaders took a radical approach, and decided to save the entire £9 billion they are losing when Britain leaves all through farming cuts, Poland would lose an eye-watering £605 million.

Under such a scenario: “Some of the poorest Member States are strongly affected by cuts. For example, in Bulgaria, Lithuania and Romania, the negative impact exceeds 0.7% of government spending.”

The final option being considered by eurocrats is to try and mitigate the impact of Brexit by balancing cuts and spending increases between the two pillars of the CAP policy.

Pillar 1 is the controversial direct payments measure, which grants farmers a set cash sum based on how much land they own, whilst Pillar 2 focusses on broader rural development measures.

This would eradicate the divisive disparity in suffering between net contributors and recipients but would still leave almost all states worse off with Spain, Poland, Greece and France losing the most.

https://www.express.co.uk/news/politics/874647/Brexit-news-shock-EU-Parliament-report-reveals-biggest-CAP-losers

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Jane Davies
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Jane Davies

Perhaps……dare I suggest a totally radical idea, Brussels will have to stop wasting billions on frivolous vanity projects, expensive lunches, magnums of Champers and jolly flights everywhere, I could go on the list of waste is endless, and spend taxpayers hard earned with more care in the future? I know it’s a stupid suggestion but I couldn’t help myself!

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