BRUSSELS, June 5 — The European Commission laid out a proposed €168-billion (RM785.9-billion) budget for 2020 today, based on Britain continuing to pay into it under an as-yet unratified Brexit agreement.

But, if the UK leaves the 28-nation bloc without a divorce deal, the union will face a €12-billion- shortfall, budget commissioner Gunther Oettinger said.

“This draft budget has been prepared in such a way as if the United Kingdom was still a member, with all its rights and duties,” he told lawmakers in the European Parliament.

“In the next weeks if there were to be a disorderly Brexit this would have to be addressed by appropriate draft amendments in October,” he said. 

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Britain voted to leave the European Union in June 2016. It signed a draft withdrawal agreement in November last year, but has yet to ratify the treaty.

Prime Minister Theresa May’s government has repeatedly failed to get the withdrawal bill past the British parliament and Brexit has been delayed until October 31.

Possible spending cuts

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Under the languishing deal agreed by May in November, the United Kingdom would continue to pay its share of the EU budget until the end of the 2014-2020 budget period.

But May has announced she will step aside and some of the candidates to replace her have warned they might quit the union without a deal — or making any more payments to it.

In this case, Oettinger said, the union would insist that Britain pay its existing bill before opening any talks on a future trading relationship.

But if London did not contribute its €12 billion to next year’s budget, Brussels would have to find a way to plug the gap.

Opinions differed on how to do that, Oettinger said. He suggested half the shortfall could come from spending cuts and half from increasing the bills of remaining EU members. 

The 2020 budget proposed by the Commission, the EU executive, is 1.3 per cent higher than this year’s spend, and must now be examined by EU lawmakers. — AFP