Bonds News

UPDATE 1-Eight Eastern EU members agree to increased payments to next EU budget

(Adds comments from Lazar, Oettinger, background)

BUDAPEST, Feb 2 (Reuters) - Eight Eastern European EU countries agreed on Friday to support an increase in payments by member states in the bloc’s next long-term budget, to help fill the hole after net contributor Britain leaves.

Ministers and other representatives of Hungary, Poland, the Czech Republic, Slovakia, Slovenia, Croatia, Bulgaria and Romania met in Budapest with the EU’s Budget Commissioner Guenther Oettinger to discuss issues including the bloc’s next budget plan.

The largest source of revenue in the EU’s budget is a uniform percentage levied on the gross national income (GNI) of each member country.

The ex-Communist countries of the east are mostly net recipients of EU funds, and worried that a shortfall in the bloc’s budget would leave them with less cash.

Oettinger said last month that the next EU budget should increase from around 1 percent of EU output to slightly more than 1.1 percent, to make up for funds the bloc will no longer receive from Britain.

Britain’s exit in March next year will deprive Brussels of some 12 billion euros from an annual budget now running around 140 billion euros.

That hole has already prompted a round of sparring between other net contributors in the West, which do not want to make up the shortfall, and the ex-communist Eastern states, which say they should not suffer from cuts in EU subsidies.

“The eight countries agreed with the increasing of the GNI-proportionate payment, which is a major success of the day,” Orban’s chief of staff Janos Lazar told a news conference.

“The eight countries opened the opportunity that the payment should increase even up to 1.1 percent (of gross national income).”

“We are encouraging the Commission to have a very ambitious budget because we need new fresh money for new tasks,” he added.

Oettinger reiterated that once Britain leaves the EU certain budgetary cuts will be necessary.

“I am extremely grateful for the eight member states that they were willing to contribute a bit more,” he told the same press conference.

Lazar said the eastern members expected the EU to reduce bureaucracy and make the budget process simpler, faster and cheaper.

“Cohesion is badly needed. It was successful but it is not over as yet,” Lazar said. (Reporting by Krisztina Than)