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Friction in Europe as Leaders Debate EU Budget

Author: Corey McDowell - Economics Editor

Published: 21 Feb 2020

Last Updated: 24 Feb 2020

Contents

There has been infighting between European leaders over the issue of budget contributions to the European Union. The bloc faces a funding shortfall of between 60 to 75 billion euros in the 2021-27 spending programme mainly due to the withdrawal of the United Kingdom, which contributed around 10.5 billion euros net to the EU annually. 

Northern European countries, such as Germany and the Netherlands, are resisting efforts to reduce the rebates they receive on their EU budget contributions. These northern states are net contributors to the EU budget and may face a domestic backlash should they have to burden the lion's share of this funding shortfall. The German chancellor, Angela Merkel, had this to say after the latest round of negotiations: 

“Germany is not satisfied with the current status of negotiations, because we think we don’t yet have an adequate balance among the net contributors to the budget”

However, France is blocking these efforts and is casting these northern nations in an “anti-European” light. Its leader, Emmanuel Macron, has shot back: 

“There is no compromise if we’re compromising European ambitions... It’s unacceptable to think that because the UK is no longer part of the EU, we need to give up on our ambitions.” 

All is not well within the European Continent. Poor economic data is providing a headache for policymakers and the never-ending issue of future UK-EU relations plagues the minds of everyone. Gold has had purple patch over the past fornight priced in euros; it has been breaking records and is currently priced at €1,560.80 per troy ounce.

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