Brexit: what can the EU do now the UK is leaving?

Arthur Beesley, Financial Times, 29.03.2017

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The EU’s ability to forge a bolder future without Britain — often seen as an obstacle to further integration — is about to be put to the test. So too is the question of whether the EU will change stance on fundamental issues such as trade and enlargement — and whether the UK’s exit will transform not just Britain but the Union itself. [...]

The EU budget

Brexit will leave a hole of some €7bn per year in the EU budget, raising questions as to whether the bloc gives Brussels more power to raise “own-resources” taxation in member states to make up the deficit. Britain never liked that idea, but neither do other countries.

Janis Emmanouilidis, of the European Policy Centre, said Brexit would intensify the challenge in the next EU budget round, for the period after 2020. “The net contributors won’t be ready to [fully] cover the loss of income resulting from Brexit and the net recipient will heavily defend their contributions from the EU budget,” he said. “It will be very difficult to square the circle.”

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