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Ukraine’s accession would cost €186B, EU estimates

Ukraine’s accession would cost €186B, EU estimates

by host

BRUSSELS — Integrating Ukraine into the European Union could mean some €186 billion in EU funds flowing to the country over seven years, according to an internal note of the Council of the EU seen by POLITICO.

Enlarging the EU further to include six Balkan countries, as well as Georgia and Moldova, would impose a further burden of around €74 billion on the EU budget, the document added.

Enlargement is set to be a main discussion point in a meeting of EU leaders later this week in the Spanish city of Granada. The European Union is preparing to open accession negotiations with Ukraine, with a formal announcement expected as soon as December.

The Council document, first reported by the Financial Times, is the first official exercise of what future enlargement could mean for the EU budget.

The note outlines opportunities, such as a larger internal market and more political clout on the global stage. But it also warns about “very significant challenges” on issues ranging from the EU’s farm budget, to the rule of law and the EU’s decision-making capacity.

Future enlargement would mean that all current EU countries “will have to pay more and receive less.” Many of the countries that now receive more money from the EU than they put in would become net contributors.

The note does not go so far as to calculate costs for each European country, but does zoom in on the projected impact on agricultural and cohesion policy. When it comes to the EU’s farming subsidies, Ukraine would be the main beneficiary, receiving €96.5 billion over seven years.

For cohesion funding, high relative poverty levels in future EU countries would mean that the Czech Republic, Estonia, Lithuania, Slovenia, Cyprus and Malta would no longer qualify for cohesion money.

All these calculations, however, only extrapolate on the basis of current budget rules while acknowledging that changes to the EU budget “would most certainly be necessary and far-reaching.”

The European Commission on Wednesday stressed that the future EU budget would not simply replicate the current one, but rather that it will need to be reformed, including around how money is raised and where it is spent.

“As we know from past experiences, the impact of enlargement will depend on multiple parameters — such as the scope, the timing, the policy design — therefore, extrapolations at this stage do not say much, in our view,” a Commission spokesperson said.

Reforms would take place as part of a wider rethink meant to prepare the EU to welcome new members, as announced by President Ursula von der Leyen in her annual address to the European Parliament last month.

Paola Tamma contributed reporting.

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