Caspian Energy Journal Caspian European Club
Thursday, 11 April 2019 15:00

EU, EIB ratings are resilient to a no-deal Brexit

EU, EIB ratings are resilient to a no-deal Brexit

The European Union and the European Investment Bank's 'AAA'/Stable ratings would not be affected by a no-deal Brexit, Caspian Energy News ( reports with reference to the press statement of Fitch Ratings.

The EIB is expected to benefit from full replacement of the UK's capital, while short-term risks to the EU budget are manageable. However, the gap in the EU's budget contributions caused by the UK's departure remains a potential medium-term risk for the EU's rating.

UK net yearly contributions to the EU budget averaged EUR9.5 billion in 2014-2017. The next Multi Annual Financial Framework (MFF) proposed for 2021-2027 foresees higher budget contributions from remaining member states, which would partly offset lost UK contributions. The EU's 2019 budget assumes a EUR17.5 billion UK gross contribution and the EU's working assumption is that the UK will also contribute to next year's budget.

The EU has prepared a no-deal 'contingency framework' to allow it to make payments to UK beneficiaries in 2019 if the UK maintains its budget contributions. However, if the UK no longer pays its national contributions to the EU budget from May 2019, the EU would attempt to address the shortfall of around EUR10 billion this year and EUR18 billion next year through higher contributions from member states and cuts in spending - a similar approach to that outlined in the MFF proposal.

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Person in charge of the newsline: Olga Nagiyeva 


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