EU leaders prepare for battle over post-Brexit budget

European Union leaders staked out opposing positions on the size and aims of the bloc's budget on Friday ahead of tough negotiations to deal with a hole in Brussels' finances created by Britain's planned departure next year. In the summit debate, all EU states except Britain are expected to say whether they agree to increase the 2021-2027 budget to pay for new common policies on security, defence and migration, at a time when Brexit will slash revenues to the common pot by 10-12 billion euros ($12-15 billion) a year. "I think we want to have new priorities, new policies, future-oriented policies, and if we cannot reduce to the right extent old policies then countries have to pay more," European Commission President Jean-Claude Juncker said on arrival. The executive Commission wants the budget to increase to 1.1-1.2% of EU gross national income from 1% now. It has proposed covering the gap left by Brexit with a mix of spending cuts and new sources of revenue. But the 27 countries that will remain in the EU when Britain leaves are deeply divided over the proposal and officials do not expect any agreement on Friday. The Netherlands, Austria, Denmark and Sweden - all of them net contributors to the budget - are most adamant in rejecting any increase in financing. All were allies of Britain in pushing through a cut in EU funding the last time the seven-year budget was set. "I think we are already paying quite a bit," Dutch Prime Minister Mark Rutte told reporters before the summit. "So no increase, modernise. Britain is leaving so that part needs to be removed from the budget." Finland and Belgium sympathise with that view.

Conditionality

But the Commission's call for more money is likely to get a sympathetic ear in Germany, already the biggest net contributor to the EU budget and prepared to pay even more. Italy and France, the next biggest net contributors, are also ready to increase payments, albeit with certain conditions. The three biggest EU countries also want to link EU payments to poorer eastern European countries to their respecting the rule of law and European "solidarity" - diplomatic jargon for sharing the burden of accepting migrants. Poland, Hungary and others have resisted pressure to take in refugees from the Middle East or Africa, angering Germany, Italy and Sweden who have to deal with the bulk of the inflows alone. The richer EU countries are also worried that nationalist-minded governments in Poland, Hungary and Romania do not respect the rule of law and EU values, undermining the independence of the judiciary and fundamental rights. The Commission has opened a formal procedure against Poland to examine whether it is complying with its own constitution. "It is quite obvious that we need some conditionality," Danish Prime Minister Lars Lokke Rasmussen told reporters when asked if EU money from the next budget should be linked to observing the rule of law and accepting migrants. "If you are a member of the European Union you are a full member, which comes with rights and obligations." Polish Prime Minister Mateusz Morawiecki, whose country is the biggest beneficiary of EU funds, said: "We want (policies) that have so far worked well for Poland... to be continued." ($1 = 0.8109 euros)