EU lawmaker: EU budget hit by drop in British pound after Brexit vote

The fall in the value of the pound since Britain's June vote to leave the European Union has led to a notable shortfall in London's contributions to the bloc's 2016 budget, the European Parliament's lead negotiator on the issue said Tuesday.

The warning came as EU lawmakers and member states are gearing up for the annual round of traditionally testy negotiations on EU spending for the coming year.

Britain - one of the largest contributors to the EU budget - remains a full paying member of the bloc until the day it leaves, but many anticipate Brexit to trigger a bitter debate over future spending plans.

The EU budget is calculated in euros, but Britain pays its share in pounds, EU lawmaker Jens Geier noted Tuesday. The exchange rate being applied is that of late 2015, but the pound has fallen in value by more than 10 per cent since June, he added.

As a result, the full euro amount of Britain's contribution is not being met, Geier said. The European Commission has estimated the shortfall to stand at 1.8 billion euros (2 billion dollars), according to his office.

The EU budget is not allowed to go into deficit, leaving three options, Geier noted. Britain would have to raise its payments; other member states would have to make up the difference; or the shortfall would need to be settled by dipping into the EU's pot of penalty revenues.

Member states must decide by the end of the year how to proceed, Geier told journalists.

Last update: Tue, 18/10/2016 - 15:15
Author: 

More from Europe

Denmark defends little-used law allowing seizure of refugee valuables

A controversial year-old Danish law that allows the seizure of assets from asylum seekers to make them pay for their...

Poroshenko to Biden: Ukraine will never submit to Russia

Ukraine will never submit to Russian aggression and return to being a vassal of the Russian empire, Ukrainian...

Merkel to 'work closely' with Trump despite attack over migration

Chancellor Angela Merkel plans to "work closely" with incoming US president Donald Trump despite his attack on her...

Trump's warning to German carmakers hits shares

Shares in German carmakers tumbled on Monday after incoming US president Donald Trump threatened the industry with...

Slovenians favour stronger border controls

Eighty-six percent of Slovenian citizens justify the government's decision to upgrade border controls due to a...