EU nations to suffer huge financial burden from no-deal Brexit

European Union is making due preparations for the no-deal Brexit since the likelihood of it is increasingly becoming inevitable. Hard Brexit, i.e. Britain’s exit from the bloc without an agreement, would not only have financial implications on the UK but also on EU member nations. The top officials of the EU are struggling to find a way of fixing a £10 billion bill, which no-deal Brexit would cost EU.

Since the European officials feel ‘being played’ by the ongoing negotiations with UK prime minister Johnson Boris over the withdrawal agreement, EU is working on a number of contingency measures. In the no-deal scenario, Johnson would refuse to contribute billions to the bloc’s 2020 budget, the annual cost of free migration and trade among the member nations. The burden of the same would then fall on the 27 remaining nations in the bloc. Though the EU is trying to reduce the cost by incorporating heavy cuts in its budget.

EU budget chief Gunther Oettinger earlier said half of the burden of £10 billion  blackhole would be absorbed by cuts while rest of the half would be met by increasing the membership fee of the member states.

On Wednesday, the European Commission, led by Jean-Claude Juncker, is said to hold a meeting with all the commissioners to sign off the key contingency plans related to the hard Brexit.

Besides, the EU officials also hope to transform a contingency plan into a reciprocal offer, allowing British fishing vessels access to European waters if the UK’s territorial fisheries are kept open for the EU member states.

During the meet, Juncker’s college of commissioners would also take a final call on whether to list no-deal Brexit as a natural disaster or not. If Brexit makes it to the list of natural disasters, it would allow the member states to claim emergency funds. The financial assistance from the European Union Solidarity Fund is generally given out to member states to recover from natural disasters, such as volcanic eruptions, forest fires, drought, and floods. The fund is a “valuable instrument in the EU toolkit for interventions in disaster situations”.

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