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

Austria's Green candidate for president defeats far-right rival

Austrians opted for a pro-European president by electing Green candidate Alexander Van der Bellen on Sunday with 53....

Hero to zero? Italy's Renzi puts career on the line in referendum

Italian Prime Minister Matteo Renzi risks becoming Europe's youngest political has-been if Sunday's constitutional...

Ten facts about Italy's constitutional referendum

Italians will vote Sunday on a constitutional referendum that could result in major institutional changes or trigger...

Austrian presidential candidates optimistic as country repeats vote

The far-right and Green contenders for the Austrian presidency were both optimistic on Sunday as citizens cast their...

Van der Bellen, a fervent European with an immigrant background

Green presidential candidate Alexander Van der Bellen looked very presidential in May when he declared his election...