EU leaders split over $1.2 trillion post-Brexit budget | THE DAILY TRIBUNE | KINGDOM OF BAHRAIN

EU leaders split over $1.2 trillion post-Brexit budget

European Union leaders discussed a new budget plan on Friday that could allow the EU to spend up to 1.1 trillion euros in the 2021-2027 period, but deep divisions among governments may block a deal for months. Under a proposal prepared by Finland, which holds the EU’s rotating presidency, the next long-term budget should have a financial capacity between 1.03 per cent and 1.08pc of the EU gross national income (GNI), a measure of output.

That would allow the EU to spend 1 trillion to 1.1 trillion euros for seven years in its first budget after the departure of Britain, one of the top contributors to EU coffers. After the meeting, some EU leaders and officials described the talks as difficult. The Finnish document, seen by Reuters, is less ambitious than proposals put forward by the European Commission, the EU executive, which is seeking a budget worth 1.1% of GNI.

The EU parliament called for an even bigger budget, 1.3% of GNI. But the Finnish proposal moves beyond a 1% cap set by Germany, the largest EU economy. And it has displeased most of the 27 EU states, EU officials said, suggesting long negotiations before a compromise can be reached. Talks on budgets are usually among the most divisive in an EU increasingly prone to quarrels.

Under the proposal, subsidies to poor regions would drop to less than 30pc of the budget from 34pc now. Aid to farmers would fall to slightly more than 30pc from over 35pc of the total.