The United Kingdom’s departure from the European Union will improve the balance of the Hungarian state budget, the Finance Ministry said.
The “UK rebate” (also known as UK correction) is a financial mechanism that reduces the United Kingdom’s contribution to the EU budget, in effect since 1985. The rebate is calculated based on a complex formula. In 2015, for example, the UK’s contribution was reduced by EUR 6.2 billion (US$7.17 billion). Although the rebate is not set in the EU treaties, it is negotiated as part of the Multiannual Financial Framework (MFF) every seven years and must be unanimously agreed.
The Hungarian Finance Ministry said that from 2004 when Hungary joined the European Union until last year this contribution amounted to a cumulated budget expenditure of almost HUF 250 billion (US$894 million).
“Next year we will contribute HUF 22 billion,” the Finance Ministry said.
Although the planned Brexit date is at the end of March 2019, the current preliminary agreements say that the United Kingdom will remain part of the EU budget for 2019 and 2020, meaning that other member states’ – including Hungary – contribution to the UK rebate will end in 2022.
