EU in spending row after Britain leaves £62bn hole in budget

Meanwhile in Brussels… EU budget talks end WITHOUT an agreement as Austria, Denmark, the Netherlands and Sweden REFUSE to pay more to plug the 75bn euro hole left by Brexit and increase spending on climate change

  • The 27 EU countries didn’t agree on the size of bloc’s budget or how to spend it
  • Chancellor Angela Merkel said ‘differences are too big still to find agreement’ 
  • The ‘Frugal Four’ – Austria, Denmark, Sweden and Netherlands – dug in heels
  • They demanded that budget is capped at 1 per cent of bloc’s economic output 

The EU’s post-Brexit budget meeting erupted into rows with poorer countries demanding more aid while their ‘frugal’ peers were determined to rein in spending.

Brexit left the EU short of around £62 billion when Britain left the bloc last month.

On Friday – after nearly 30 hours of discussions – the 27 remaining EU countries failed to agree on the overall size of the bloc’s 2021 to 2027 budget or how to spend it.

The EU’s post-Brexit budget meeting erupted into rows with poorer countries demanding more aid and their ‘frugal’ peers determined to rein in spending. Pictured: German Chancellor Angela Merkel attending a press conference after the meeting yesterday

Speaking after the talks in the EU’s Brussels hub, German Chancellor Angela Merkel said: ‘We have to acknowledge that the differences are too big still to find agreement.’ 

Setting the budget has always been a tug of war, but was fiercer than ever this time because Britain’s exit from the bloc last month came amid costly new challenges, from climate change to managing migration and a growing digital economy.

The standoff has exposed rifts between countries in the north and south, between east and west, and between more developed and less advanced economies.

Brexit left the EU short of around £62 billion when Britain left the bloc last month. Pictured left to right: Czech Prime Minister Andrej Babis, Greece Prime Minister Kyriakos Mitsotakis and Angela Merkel at the meeting

Net payers dubbed the ‘Frugal Four’ – Austria, Denmark, Sweden and the Netherlands – dug in their heels, demanding that the budget is capped at 1 per cent of the bloc’s economic output.

Beneficiaries of the generous handouts opposed deep cuts in development aid and farming subsidies compared to those they get under the current 2014 to 2020 plan.

‘Nobody was really pleased,’ said Prime Minister Andrej Plenkovic of Croatia, one of the countries seeking more aid.


Net payers dubbed the ‘Frugal Four’ – Austria, Denmark, Sweden and the Netherlands – dug in their heels, demanding that the budget is capped at 1 per cent of the bloc’s economic output. Left: Sweden’s Prime Minister Stefan Lofven. Right: Netherlands’ Prime Minister Mark Rutte

The feud also underlined the fact that, following the turmoil of Brexit that brought them together, the bloc still has many issues that divide it.

French President Emmanuel Macron said: ‘These divisions are there. We don’t need Britain for that. 

‘They were playing out during the financial crisis a decade ago, during the migration crisis, we’re now seeing them on budget issues.’


The ‘Frugal Four’ stood firmly against a scheme that would allocate one-third for development aid to help poorer regions grow and another third on support for farmers, a key priority for Paris. Pictured: Denmark’s Prime Minister Mette Frederiksen (left) and Austria’s Chancellor Sebastian Kurz (right) are two of the frugal four

Speaking after the talks in the EU’s Brussels hub, German Chancellor Angela Merkel said: ‘We have to acknowledge that the differences are too big still to find agreement’

After complex negotiations, the leaders were no closer to a deal than when they first convened on Thursday with a proposal to set the budget at 1.074 per cent of the continent’s gross national income, or some 1.09 trillion euros (around £900 billion).

A new blueprint of 1.069 per cent equally failed to impress and was dubbed by one EU official as ‘a Frankenstein proposal’.

The ‘Frugal Four’ stood firmly against a scheme that would allocate one-third for development aid to help poorer regions grow and another third on support for farmers, a key priority for Paris.

Germany, the EU’s powerhouse and biggest net contributor, was upset about taking the brunt of the Brexit shortfall and coming out worse off than France.

Berlin, Vienna and others wanted to see more focus on border management following Europe’s migrant crisis of 2015-16, tackling climate change, beefing up security and modernising the bloc’s economy through digital investment.

There will have to be a further summit – or summits – to get a deal over the line but no date was set for now. Without an agreement by the end of the year, the bloc will have to freeze much of its projects from 2021.

Austrian Chancellor Sebastian Kurtz said: ‘In the past it has always taken two or three meetings to reach a result.’

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