Brexit begins to hit home at EU

Malcolm Latarche
Malcolm Latarche

29 June 2017


With negotiations on the UK’s withdrawal from the EU having officially having got under way, the EU is beginning to realise it could leave the remaining 27 countries with a €20bn a year hole in their budget, requiring additional EU taxes to fill the gap. According to press reports across a range of media, Günther Oettinger, the European commissioner for the budget, has said the loss to the bloc had to be acknowledged, and big decisions made about the scale of the its ambitions after March 2019.
“We won’t have the UK with us any more, but they were net payers despite the Thatcher rebate, so we will have a gap of €10bn-€11bn a year,” the German official said.
Writing in a separate blog, Oettinger said the need to finance new initiatives in areas such as defence and security meant “the total gap could therefore be up to twice as much”. This is the first acknowledgement from the EU of the effect of the UK withdrawal but as yet there is little to learn about what the EU plans for a future without the UK. After recent disputed over EU policy in a number of areas, one option might be to force out members such as Hungary and Poland that are net recipients of EU funding but that would hardly be considered as a choice by those that want to see the organisation grow not shrink further. The other alternatives are to reduce expenditure or to increase taxation. That could affect shipping in two ways. There is no doubt that some research projects such as HERCULES and many others related to shipping have been of benefit to the industry, but there are as many more initiatives that have cost the industry financially. The early introduction of sulphur levels being one and the newly introduced MRV being another. At the IMO, the EU is frequently at odds with shipping bodies and other nations over the direction of regulation. It also funds directly or indirectly many NGOs that are critical of the shipping industry. If there is a reduction in funding shipping may lose out in some areas but gain in others. On the other hand, if the EU decides that increasing taxation is a route to follow, shipping could find itself on the wrong end of new levies which could be on CO2 emissions or something else. As a vital service to a developed region, the shipping industry should be closely following events as they unfold.