Impact of Brexit on the EU budget and Dutch finances

The United Kingdom is no longer a European Union member state. Therefore it will stop making financial contributions to the EU. This means EU funds will decrease.

EU budget gap

The Netherlands believes that a smaller EU should also mean a smaller EU budget, and that the EU must cut spending. Some of the other EU countries have a different opinion. They believe that the remaining 27 member states must plug the gap left by the UK’s departure.

The European Commission has proposed:

  • covering half the shortfall through savings
  • dividing the other half of the shortfall between the 27 member states. 

Negotiations are still ongoing.

Impact of Brexit on Dutch public finances

The exact impact will depend on the negotiations between the UK and the EU about their future relationship.

Brexit may affect Dutch public finances in 3 ways:

  1. If Brexit results in less trade with the UK, less tax will be collected.
  2. The Netherlands may have to contribute more to the EU multiannual budget. This is because Brexit means the UK will stop contributing financially.
  3. Agencies that carry out government policy, like Customs and the Netherlands Food and Consumer Product Safety Authority (NVWA), will face higher costs. They will need more staff, because they will have to carry out more checks on goods entering the country after Brexit.

The exact impact on Dutch public finances will depend on:

  • the negotiations between the UK and the EU during the transition period, which runs until 31 December 2020
  • any new trade agreement between the Netherlands and the UK.