The budget is cut for Brexit

We still have to wait, but thanks to Brexit, the Hungarian budget can get the correction for the British. More than twenty billion forint is being debated on this issue and discussions have been going on for a long time.

While the United Kingdom withdraws from the European Union, the UK correction and its financing cease to exist, the Ministry of Finance (PM) has informed the World Economy. This means that the 20 billion HUF of this year's average annual budget is expected to be outside the Hungarian budget after 2021.

The planned date of Brex is the end of March 2019, but next year's budget 21.8 billion forint is still cut off to compensate the British.

The Prime Minister stated that the amount will not change at the departure of the island, because the draft of the exit agreement stipulates that the British will participate in the financing of the EU budget for 2019 and 2020 as if they were still EU Member States. The European Commission (EB) also presented its budget for the following year this year to the European Council and the European Parliament in May.

The legality of British damages has been discussed in Brussels for many years
Photo: Shutterstock

It follows, however, that the Hungarian Government must also calculate the UK correction in its budget for 2019-2021, but after the transitional period this rule will be reset. Better later than ever:

Since joining the EU in 2004, Hungary has financed the UK correction and in 2017 it transferred a total of HUF 243 billion to the EU at this address.

Compensation for the United Kingdom – an agreement on this subject was adopted in 1984 – served to reduce the budgetary imbalance on the island, since the United Kingdom was charged with an excessive EU budget burden in contrast to its wealth.

The amount of the compensation is about five billion euros (about 1600 billion forint), the payment of which is shared by the EC on the basis of a fairly complex formula between the Member States.

This is done in practice by the fact that the amount of the correction will reduce the United Kingdom's contribution to the EU budget and, on the other hand, will increase the contribution of the Member State concerned to the UK correction.

Since decades ago, there has been a milder or worse debate in Brussels, a truly unfair situation has now disappeared.

You can read the full article in the World Economy edition of Wednesday

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