Accession to the European Union will give Ukraine the right to receive financing in the amount of 186 billion euros over seven years. About this the Financial Times with reference to the calculations of the financial consequences in case of expansion of the block.
Modeling the impact of the potential accession of nine new member states highlights the profound political and financial implications of expanding the union across the continent. Clearing the way for Ukraine's membership has become a key priority for EU leaders since Russia's full-scale invasion last year.
This summer, EU officials assessed the potential financial implications in a study seen by the Financial Times that used current EU budget rules for 2021-2027. They were applied to the enlarged bloc, which includes Ukraine, Moldova, Georgia and six Western Balkan states.
According to the publication's calculations, the financial consequences of joining all nine members to the existing budget, known as the multiannual financial plan, would amount to 256,8 billion euros. The consequences for current member states would include a reduction in agricultural subsidies by about a fifth.
While full enlargement could take a decade or more and lead to significant reforms to existing fiscal mechanisms, the projected scale of the required changes would dramatically upset the financial balance within the bloc.
"All member states will have to pay more to the EU budget and receive less from it; many member states, which are now net recipients, will become net payers (to the budget — ed.),” the document of the EU Council secretariat concludes.
As the publication notes, the calculations of the general secretariat of the council, the body that represents the governments of the 27 member states of the bloc, indicate that with the appearance of nine new members, the EU budget will increase by 21% to 1,47 trillion euros.
The entry of the nine countries would lead to a series of "far-reaching" adjustments that could include significant increases in net contributions to the budget from wealthier countries such as Germany, France and the Netherlands. The document refers to the need for "transitional periods and protective measures."
Applying the current rules to the enlarged bloc, Ukraine will be eligible for EUR 96,5 billion under the EU's Common Agricultural Policy over seven years. According to the study, such financial changes would reduce agricultural subsidies for current member states by about 20 percent.
Ukraine will also be entitled to 61 billion euros from EU cohesion funds, which are aimed at improving infrastructure in poorer member states. The study estimates that the Czech Republic, Estonia, Lithuania, Slovenia, Cyprus and Malta, along with nine additional member states, will no longer be eligible for Cohesion Fund funding.
The calculations by the General Secretariat of the Council of the EU, the body that represents the governments of the bloc's 27 member states, came as the EU weighs whether to agree to start formal accession talks with Ukraine by the end of this year, as Kyiv has requested.
The press secretary of the Council of the EU stated that the body does not comment on leaks.
EU leaders will meet in Spain for the first detailed discussion of enlargement and how it will change the union.
The study uses a simple extrapolation of current EU budget rules, which will almost certainly be adjusted if the bloc expands. It was not developed jointly with the European Commission and was not approved by it. The document also does not take into account the possible membership of Turkey.
“While the opportunities may outweigh the costs/risks for some policies and enlargement will bring benefits to current member states, enlargement will also have far-reaching implications for the EU budget. [These] very significant challenges for the EU need to be carefully addressed so that the new enlargement is at least accepted, if not supported, by our citizens," the document reads.
The study outlines opportunities for the EU from enlargement, including increased geopolitical influence, increasing the size of the bloc's internal market by 66 million people to 517 million people, and addressing labor shortages.
But this makes it clear that Ukraine's influence on the EU agricultural subsidy regime will be the most significant. Ukraine will become the largest recipient of subsidies in the EU with 41,1 million hectares of agricultural land, pushing France to second place. This will mean that payments for current recipients will be reduced by 20,3% per hectare of eligible agricultural land.
In addition to Ukraine, the joining of eight other countries to the Common Agricultural Policy of the EU will cost a total of EUR 29,9 billion in payments.
"These figures will not satisfy anyone. They make it clear that for Ukraine to join the EU, a fundamental reform of the EU budget and its main policy areas is necessary, or that the entire Ukrainian issue must be solved innovatively and outside the existing EU budget structures," said Eurasia Group analyst Mujtaba Rahman.
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