Sputnik discussed the pace of economic growth in the Eurozone and its post-Brexit budget with Dr. Stella Ladi, senior lecturer at Queen Mary University of London.
Sputnik: What can you say about the overall slower growth trending in the UK (EU) and, if it continues, how will it affect the post-Brexit EU?
Dr. Stella Ladi: I think you're referring to the EU’s slow growth, the Eurozone’s slow growth. I think we cannot really say that this is stable at the moment, figures are not staying the same through the month, it's only the first time that we have such a figure and I don't think we have to worry too much about it at the moment because it could be just a coincidence because of other reasons, such as winter or anything else that has caused it. So we have to wait and see how the figures develop in the coming months.
Sputnik: When we talk about plans for the new budget, of course, it's been said that a smaller EU – by one country, a large country, the UK – should have a smaller budget. Do you think that the budget that's been proposed should be amended significantly?
Dr. Stella Ladi: This budget will be negotiated for months in reality, so we won't expect to have a compromise before 2019-2020, so there may be more amendments. What we have now is a smaller budget and the idea behind it is that the European Union has to do more with less; this is what the Commission has said and this is what has been discussed up to now. So there may be amendments, but it's very difficult to predict exactly what will happen, since this will be discussed for such a long time and many other events may come into place, and as we know events really can influence the way negotiations go from the immigration crisis becoming bigger, to economic figures showing less growth; so it's still early days, we still have the first proposal on the table.
Sputnik: To what extent will the Brexit deal have an effect on what will actually be confirmed as the budget for the EU, is that a big factor? What kind of a relationship the EU will continue to have with the UK post-Brexit?
Dr. Stella Ladi: These are two different questions. As for the first question, there's a 13 billion euro hole from the UK leaving, which means that the budget has to be less, has to be smaller, and also it means that member states have to contribute a bit more, and maybe the European Commission has to find other internal ways of revenue, taxes or anything else they can really think of to chip in to this budget. Secondly, some of the gaps that we see in the current budget, reflect Brexit, but I will say there will be future relationships, for example, it seems like in the new budget research is funded more than in the previous budget and there there's already discussion with the UK that there should be post-Brexit participation of Britain, so maybe there will also be some kind of contribution, because I cannot imagine participation without contribution. Again, this will be seen in the coming months and years.
Sputnik: There is also the issue which hasn’t been resolved of the sort of “alimony payment” that Britain must make as it leaves the EU and do we have any idea if that’s going to have a significant impact and then there will be sort of a phasing out process where it won’t just be clean cut, it will be a phasing out of Britain's participation in various structures of the EU and programs?
Dr. Stella Ladi: It's pretty messy because there are many different policies and programs that I think, at least, people are involved in, the communities, the professional communities are involved in this, like research, that would like to carry on participating, so there may be post-Brexit agreements in various issues, at least this is what the professional community is hoping for. Of course, there will be the money that Britain will have to pay for the divorce, as we say, this is going to be some set up for the budget, of course, but this is calculated when we talk about the hole that is going to be created in the budget, and, of course, the hole that we’re talking about, we don’t know exactly the amount, it is more or less what we assume we will have after the negotiations are finished. But this has not been calculated with accuracy.
Sputnik: Can you explain to us what the primary differences between this new budget and previous budgets will likely be, what will be the priorities for the EU?
Dr. Stella Ladi: Research is a priority, it looks like it has an increase, while agriculture and structural funds seem to get less in this budget, so it's 5% less for agriculture and 7% less for cohesion funds, but it will all be negotiated as I said.
The views and opinions expressed in this article are those of the speaker and do not necessarily reflect those of Sputnik.
