German Chancellor Angela Merkel, center, speaks with French President Emmanuel Macron, left, and Italian Prime Minister Paolo Gentiloni, right, as they walk across the street to an EU summit at the Europa building in Brussels on Friday, Feb. 23, 2018. European Union leaders meet without Britain Friday looking to plug a major budget hole after Brexit and endorse a plan to streamline the European Parliament by sharing out the country's seats. (AP Photo/Virginia Mayo)

Spend more or do less? EU leaders discuss post-Brexit budget

February 23, 2018 - 10:10 am

BRUSSELS (AP) — The leaders of European Union nations — minus Britain's prime minister — met Friday to begin what are expected to be acrimonious talks on how the bloc will cope with a multibillion-euro hole in its budget caused by Britain's departure.

Yet one leader warned not to expect a definitive decision any time soon on the European Union's first multi-year budget in the post-Brexit era.

"This is the start of an intense and difficult process," cautioned Belgian Prime Minister Charles Michel. "There are so many political questions — fundamental questions — that it's necessary to start a dialogue, to listen to everybody."

Lithuanian President Dalia Grybauskaite, a former EU budget commissioner, said the choice is "to increase the budget and find new resources, European resources or taxes, or to reduce some other old programs."

Britain is set to leave the EU — the first country to exit the world's biggest trading bloc — in late March 2019. But Brexit talks on Britain's departure must be finalized by the fall so EU nations' parliaments can ratify any withdrawal agreement.

The EU's executive commission estimates that Britain's planned departure will cut contributions by around 12 billion euros ($14.8 billion) a year. Britain has agreed to pay its budget share until 2020.

European Commission President Jean-Claude Juncker said last month that the EU's 2014-2020 budget, which totals some 1.09 trillion euros ($1.34 trillion), is insufficient to fund the bloc's growing ambitions in areas such as defense, tackling migration and border control.

Dutch Prime Minister Mark Rutte disagreed, a sign of divisions between leaders that could presage bitter wrangling during months of budget discussions.

Facing pressure at home not to stump up any extra cash for Brussels, Rutte said the EU can keep costs under control by modernizing its programs.

"We spend a lot in Europe. There are good reasons for that," he said. "But the amount does not have to rise."

Brexit won't only cause financial headaches. Leaders were also expected to agree to slim down the European parliament from 751 seats to 705 and redistribute seats relinquished by departing British lawmakers.

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