Britain would lose EU rebate even if it decided to ditch Brexit - EU official

FILE PHOTO: European Union Budget Commissioner Guenther Oettinger holds a news conference to present the EU executive's final proposal for the bloc's next long-term budget, in Brussels, Belgium, May 2, 2018. REUTERS/Francois Lenoir

BRUSSELS (Reuters) - The European Union’s budget chief Guenther Oettinger said on Friday Britain would lose its rebate even in the “pleasant but improbable” event of it staying in the bloc.

On March 29, Britain is due to become the first country to ever leave the EU. It expects a status-quo transition until the end of 2020 during which it would continue paying contributions to the bloc and follow its rules.

It would in exchange keep access to the bloc’s single market and customs union but no longer have a say in decision-making that would be done by the other 27 states staying in the EU.

After Brexit, the EU wants to wind down in stages all the rebates, including those that the Netherlands or Denmark enjoy. The bloc’s executive European Commission has proposed to have none in the next common budget for 2021-2024.

“I think that even for the pleasant but improbable case that the British wish to remain... then in my budgetary framework I would stick to the phased ending of rebates. The rebates, in a family of 27, are no longer appropriate.”

Britain currently can recover about a half of its contributions to the bloc through the deal.

Many question whether Britain and the EU can finalise extremely complex negotiations on a new, broad trade pact in less than two years.

Any extension of the transition period, as suggested by Britain’s finance minister Philip Hammond on Friday, would raise the issue of the British rebate as it would coincide with the bloc entering the new budgetary period that could already be rebate-free.

Reporting by Philip Blenkinsop and Gabriela Baczynska; Editing by Toby Chopra