Oettinger wants to scrap all rebates in post-Brexit EU budget

February 24, 2020 / By mobanmarket

Oettinger wants to scrap all rebates in post-Brexit EU budget

Budget commissioner warns that without trade deal, Britain would be on the same level as Uganda.

BERLIN — Günther Oettinger wants all rebates to be removed from the EU’s next long-term budget, not just that of the exiting U.K.

“I want to propose a budget framework that does not only do without the mother of all rebates [the U.K.’s] but without all of its children as well,” the European budget commissioner said Thursday during a panel discussion at the German foreign ministry.

Britain will be leaving the EU in 2019, a year before the current long-term budget — known as a Multiannual Financial Framework — ends. It’s Oettinger’s job to come up with a new seven-year budget plan. However, earlier this week, Oettinger urged the Commission to delay putting forward a new multi-year framework because Brexit had created too much uncertainty. EU officials are insisting that a financial settlement be a main topic in the first phase of negotiations with the U.K, saying clarity is crucial.

In 1984, Margaret Thatcher negotiated a rebate — an annual reduction in contributions — for the U.K. It was followed by a number of other, smaller rebates for EU countries, including Germany, Austria and Denmark.

“With the U.K. leaving, the end of the EU-U.K. rebate offers us the chance to cancel all other rebates as well,” Oettinger said Thursday.

The current seven-year EU budget was the subject of a prolonged fight between national governments and the European Commission and European Parliament.

Many governments, led by the U.K.’s David Cameron, fought to keep 2014-2020 spending below a symbolic threshold of €1 trillion. Other governments, particularly those that receive more money from the EU budget than they pay in, fought back, in a bid to preserve their levels of subsidies and investments.

On Thursday, the German commissioner also warned the U.K. about crashing out of the EU without a comprehensive trade deal.

“If [a deal] doesn’t happen [by March 2019] then we’ll consider our relationship with the United Kingdom the same as our relationship with Uganda,” he said.

Asked about Prime Minister Theresa May’s claim that “no deal is better than a bad deal,” Oettinger said “this is something nobody would want. This is why I expect that after the elections on June 8, the new British government will recognize the added value and advantage of settling our future relations.”

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