European Council President Charles Michel said the €5 billion reserve would be used to “counter unforeseen circumstances” of Brexit. Announcing his plans for the EU’s next budget, the eurocrat said: “Brexit is challenging for all of us. “And that’s why we propose a Brexit reserve of five billion.
“We will create another reserve in order to counter the unforeseen consequences in the most-affected member states and sectors.”
Mr Michel has asked the European Commission to carry out a “needs assessment” in order to identify the states, regions and sectors in need of a post-Brexit boost.
The EU’s most senior official aims to have the fund in place by the end of next year after the first consequences of of the new relationship between Britain and Brussels have been laid bare.
Charles Michel announces a new Brexit reserve to help pay for impact of UK’s departure from EU
Charles Michel is the European Council’s president
“Brexit will have consequences in Europe for the member states,” he added.
“And that’s why I think it’s necessary to ask the Commission to prepare a needs assessment.
“On the basis of that needs assessment, we can imagine some more concrete proposals and allocation criteria to support the regions and sectors that would be most affected.”
EU leaders will meet at a European Council summit next week
European sources said the fund will be used regardless of the outcome of the trade negotiations between the bloc and Britain.
But officials said there is a possibility the fund could be slashed in size if a free-trade agreement is reached before the end of the year.
The announcement came as part of his latest proposal for the bloc’s next seven-year budget and a coronavirus recovery fund.
Brexit negotiators Michel Barnier and David Frost
Mr Michel set out a €1.074 trillion spending plan for the EU and an extra €750 billion to support pandemic-stricken regions and industries.
He said: “The COVID-19 crisis presents Europe with a challenge of historic proportions.
“We are slowly exiting the acute health crisis. While utmost vigilance is still required on the sanitary situation, the emphasis is now shifting to mitigating the socio-economic damage.”
His proposal will act as the starting point for negotiations between the EU’s 27 national leaders when they meet on July 17.
The talks could last as long as three days with significant differences between capitals over the plans.
Mr Michel cut the overall package down in size in a bid to win over more fiscally prudent member states.
His €1.074 trillion budget proposal is down on the European Commission’s suggested €1.094 trillion package.