EU's poorer nations warn against aid cut in upcoming budget

Portuguese Prime Minister Antonio Costa said that the EU needs to arrive at a consensus on the next budget quickly (Credit: AFP)

The European Union needs to arrive at a swift consensus over its next long-term budget in light of the UK's exit from the bloc and the loss of significant financial contributions from London, the EU's poorer member-states have warned.

During a summit in Beja, Portugal, a group of 17 eastern and Mediterranean states called "Friends of Cohesion" cautioned against a "sharp and disproportional" cut to their aid money and said that the funds for 2021 to 2027 "should maintain the level" of the previous budget.

The EU Cohesion Fund, which is usually reserved for the economically backward member nations, has come under the scanner after the so-called "frugal" countries, including Germany, proposed a reduction in size of the fund and special clauses to help determine where the money would be spent.

According to figures available on the European Parliament website, the European Commission has proposed an allocation of $45.82 billion for the 2021-2029 period, down from $70 billion in 2014-2020.

The EU Cohesion Fund provides financial aid to poorer nations in the bloc (Credit: AP)

Portuguese Prime Minister Antonio Costa told the media: "More than ever we have to affirm the cohesion of the European Union, as it is now more fragile with the departure of the United Kingdom.

"It's urgent to reach an agreement on the next European budget and the member-states who met today made it clear they want to reach a definitive agreement on February 20," he added.

Britain accounted for nearly 15 percent of the EU economy and was also its biggest defense spender.

The declaration was signed by 15 of the 17 states attending the meeting, namely Bulgaria, Cyprus, Czechia, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia and Spain.

Italy refrained from putting its name on the document while Croatia, which holds the rotating EU presidency, chose to remain neutral.

The group reiterated that "any cuts in investment capacity of cohesion regions would be unacceptable" and given the advanced stages of the budget negotiations, "no technical elements with major negative impact should be introduced."

Britain accounted for nearly 15 percent of the EU economy and was also its biggest defense spender (Credit: AFP)

The "Friends of Cohesion" summit was preceded by the President of the European Council, Charles Michel, calling for a special meeting on 20 February to discuss the budget.

Remember to sign up to Global Business Daily here to get our top headlines direct to your inbox every weekday

Source(s): Reuters ,AFP