The nightmare scenario is predicted by the European Commission’s own regional affairs department, DG Regio.
It found cutting the post-Brexit budget by a sum equivalent to the UK’s current share of 12.5 per cent – or 14 per cent without the rebate – would mean the end of funding for Western European countries from the EU’s regional aid programme.
The study said Brussels would be able to provide “support for less developed regions only” meaning only the poorest countries in the EU, and regions with a GDP per capita of less than 75 per cent of the EU average, would continue to get funding.
Germany, mainland France, Benelux and Scandinavian countries, Ireland and Austria would no longer receive any money under the EU’s main subsidies regime.
Outside Eastern Europe, only Cyprus, Greece and Portugal and the southern regions of Italy and Spain would continue to have access to EU “cohesion funds,” which currently account for roughly a third of the EU budget.
DG Regio officials urged the EU to try to maintain existing levels of funding post-Brexit but that would mean richer countries pouring even more cash into the Brussels’ coffers.
The regional aid programme makes Germany’s powerful regions an ally for Europe’s cash-strapped east and southern members because they all want to continue receiving their EU pay-outs.
But Berlin wants to avoid picking up a bigger share of the bill after Brexit which is why Angela Merkel has taken such a hardline position on Britain’s financial settlement.
The DG Regio report says: “The policy should continue targeting all regions post-2020.”
EU Council of Regions president Karl-Heinz Lambertz, told politico.eu: “There are economic, social and territorial disparities in all EU regions.
“Solidarity cannot be limited to only few regions, because there are people needing European intervention to provide jobs, training, broadband or public infrastructures everywhere.
“Cohesion in economic and social affairs is a founding objective of our European Union
“The money used is only 0.37 percent of the EU’s GDP. Let’s not undermine this effective policy.”