EU IN LIMBO: Merkel warns Brexit blackhole will not be fixed until May 2019

The German Chancellor claimed an optimistic target of thrashing out new medium-term financial planning before the European elections in May next year would not be possible.

Speaking at a meeting with Dutch Prime Minister Mark Rutte, she admitted the situation facing the EU after Brexit was “very demanding”.

When Britain leaves the EU next year, it will leave a £11.5billion shortfall even as it tries to find extra money for border control and defence projects.

Jean-Claude Juncker has ordered EU nations to prop-up the ailing bloc in the wake of the UK’s departure by raising their contributions to 1 per cent of GDP. 

But there is a clear division between nations over whether they should pay more.

The Dutch have completely ruled out the idea, with a Government statement saying: “The Netherlands will not increase its contribution to the EU budget.

“The decrease of EU member states should result in a more adequate budget reduction.”

Austria, Sweden and Denmark have also expressed concerns. Germany, on the other hand, already the biggest net contributor to the EU budget, has said it would be ready to pay even more.

Holland argues countries on the west coast of Europe, including the Netherlands, Ireland, Denmark and Spain will already be hit in the pocket by Britain’s decision to unshackle itself from the bloc. 

But European Budget Commissioner Günther Oettinger has insisted they would have no choice but to pay up. 

He said: “Now, I am no magician, ladies and gentlemen. We will only be able to square the circle with more. “We won’t be able to with what we currently have. 

“And that is why I believe that no matter what the starting position is, the end position of a given government can be different.” 

The debate shows the cracks starting emerge in the 27-member bloc, who have put on a united front in Brexit talks. 

The issue will be top of the list at a summit of EU leaders on Friday, as the bloc tries to deal with the Brexit fallout. An EU official said this week: “The EU budget has been pretty divisive and will remain so even without the UK around the table. 

“A majority of member states would support an increase in the EU budget, but those who are sceptical, or against, are very determined and maybe more determined than those who are for. We will not have a consensual view on Friday.”

(Additional reporting by Monika Pallenberg)