Germany’s Scholz Rejects Calls to Boost EU’s Post-Brexit Budget

Birgit Jennen and Stephanie Flanders

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German Finance Minister Olaf Scholz pushed back against calls from some member states to increase the European Union’s post-Brexit budget, saying spending should be capped at the current level.

Scholz told Bloomberg’s “Future of German Growth” event in Berlin that he wants the trillion-euro ($1.1 trillion), seven-year budget to remain at 1% of the bloc’s gross domestic product. He urged EU nations to agree a deal well before Germany takes over the bloc’s presidency in the second half of next year, saying that otherwise some spending programs could be affected.

The current proposal is “not a very reform budget,” Scholz said in an on-stage interview with Bloomberg Senior Executive Editor for Economics Stephanie Flanders. It’s unusual when “you do not dispute the things you did in the past, you just discuss what you want to have extra,” he said.

Britain is a net contributor to the EU and some richer members are calling for the hole it will leave in the bloc’s finances to be covered by cuts for the 2021-2027 period. Poorer ones want everyone else to pay more.

“If we just stick to what we have, 1% of GDP, it is an increase and a big increase which will also mean billions of extra money each year to be financed by many countries and also by Germany,” Scholz said.

The EU’s outgoing budget commissioner, Guenther Oettinger, said Thursday he sees Germany’s proposal for 1% of GDP as a “starting point and not as the end point of the discussion.”

“Nobody from Germany has told me yet where I should make cuts in the budget,” he told reporters, adding that the “chances are good” for an agreement in the spring.

Scholz said the EU should move “away from unanimous votes” in some areas of policy making: “For example in foreign policy there must be the ability to have majority votes for a decision,” the German finance minister said.

--With assistance from Arne Delfs.

To contact the reporters on this story: Birgit Jennen in Berlin at bjennen1@bloomberg.net;Stephanie Flanders in London at flanders@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Iain Rogers, Chris Reiter

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