Lithuanian President Dalia Grybauskaite told the press yesterday at the informal Brussels summit that the EU would lose around a fifth of its budget due to Brexit.
The shock figure is far greater than previous estimates, and adds to Jean-Claude Juncker’s financial headache ahead of an expected row over how to deal with the financial shortcoming.
The Lithuanian leader did not reveal the exact figure, but the last EU budget came to 140bn euros a year, or one percent of economic output in the bloc.
A fifth of that figure would amount to a financial blackhole of £24.5 (€28bn), which is more than double the previous figure of the Brexit cost, mooted at £12bn.
Mrs Grybauskaite told reporters: “Negotiations on the budget currently are in their initial phase.
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“EU member states will have to decide how to provide sufficient funding to ongoing programs and to future priority projects.
“Today we have a lot of challenges and we have the phenomena of Brexit, so that means the lack of payment after Brexit and the new promises is about 20%.
“That is a 20% lack of financial resources, so we have to decide, either finding new resources, new European taxes, or reducing old programmes.
“Obviously, there is a wish to finish the budget before the European Parliament’s election in 2019.
“However, usually the accord is reached moments before the new financial long-term perspective comes into force.”
Following these remarks, other EU leaders staked out their opening positions on the budget debate.
The summit yesterday launched the discussion on the size and shape of a seven-year budget package to run from 2021.
While ex-communist states urged wealthier neighbours to plug a nearly 10 percent annual revenue gap being left by Britain, the Dutch led a group of small, rich countries refusing to chip in any more to the EU.
Germany and France, the biggest economies, both offered to increase their own contributions, though both set out conditions for that, including new priorities and less waste.
The Commission has suggested that the next package should be increased by about 10 percent but there was little sign on Friday that governments are willing to pay that.