EU leaders share the common view that more funds should be allocated in the next long-term budget in regards to defence, security and “countering illegal migration”.

Following the meeting on the preliminary discussion of the first budget after Brexit, Donald Tusk announced that many government leaders in the Union are ready to spend more on the next budgetary cycle, which spands from 2021 to 2027. The aim is to compensate for income loss after Britain leaves the Union in 2019 and to have funds to finance the new common policies.

With Brexit in 2019, the Union’s budget will shrink by amount between €12 and €13 billion. The EC wants this deficit to be covered by reducing costs on the one hand and increasing contributions from Member States on the other. The Brussels proposal is for each country to increase contribution by 1% from their GDP.

However, Mr. Tusk acknowledged that the ambitious deadline by the end of the year for reaching a budget agreement (for the period of 2021 and 2027) seems to be rather complicated to achieve.

The President of the EC, Jean-Claude Juncker added that in order to protect cohesion funds for agriculture that are 70 percent of the budget, we need to reduce expenses in other areas, and to deal with more resources for immigration and security.

However, in order to maintain the current amount of funds in the European budget, Member States must increase their contributions by about 10 percent. This requirement hits a firm resistance from the majority of countries that give more than they get. The Netherlands, Austria, Sweden, Belgium and Denmark are strongly opposing such development.

The most notorious advocate of cost-saving in this quartet is Dutch Prime Minister, Mark Rutte, who announced that the EU budget must be modernized, some of the current expenditure to be downsized and the saved money should to be redirected to border protection and the fight against cybercrimes.

The annual budget shall determine all revenue and expenditure of the European Union for a period of one year. It guarantees funding for EU programmes and activities in all areas of EU policies, such as agriculture, research, regional policy and others.

The annual budget also ensures that the EU receives the necessary revenue to finance its expenditure. Revenue and expenditure in the annual budget of the EU must, as a rule, be balanced.