The leaders of the Baltic States have asked the European Union to expand its budget once the United Kingdom has left it and also to seek “new financial resources of its own”.
According to the Prime Ministers of Lithuania and Latvia and the President of Estonia, the EU budget must be over 1% of the EU-27 gross domestic product (excluding Britain). They also urged that the money for innovation, research and youth policies are not reduced, as well as to increase farmers’ subsidies for the three countries. EUR 150 million will be needed for a new border management system for the Union.
EU leaders will meet this week at a High Summit in Brussels to discuss how to fill the gaps in the future EU budget after Brexit.
The meeting is scheduled for 23 February and it should be a key step in the development of a new and more cohesive Union that Brussels wants to build after UK’s exit.
But only a year before one of its most important Member States to withdraw (something scheduled for March 2019), a major obstacle on the EU path is the resolution of the budgetary issues.
The European Union’s budget is defined in the founding treaties of the Union: the Treaty of Lisbon and the Maastricht Treaty. The budget for each year is part of the long-term cost plan called “financial framework”.
The annual budget is defined in the context of the seven-year financial frameworks by the Council of the European Union, i.e. by the representatives of the Member States and by the directly elected European Parliament. The European Commission is submitting the budget proposal to the Parliament and is also responsible for its implementation.
In recent analyzes, at least EUR 25 billion must be allocated to euro area countries within the next EU budget. This will provide a minimum level and it will help avoiding the concentrating funding only for individual Member States.
According to Brussels, the stabilization function will be built progressively over time, relying on the reverse credits guaranteed by the European budget, loans from the European Monetary Fund, a voluntary guarantee mechanism based on the state contribution, as well as a subsidy of the European budget.
