In an opinion published today, the European Court of Auditors (ECA) raises some concerns over
the recent proposal for a Brexit Adjustment Reserve (BAR). This €5 billion fund is a solidarity
tool which is intended to support those Member States, regions and sectors worst affected by
the UK’s withdrawal from the EU. According to the auditors, while the proposal provides
flexibility for Member States, the design of the reserve creates a number of uncertainties and
risks.
The European Commission proposes that 80% of the fund (€4 billion) should be granted to
Member States in the form of pre-financing following the BAR’s adoption. Member States would
be allocated their share of pre-financing on the basis of the estimated impact on their economies,
taking into account two factors: trade with the UK and fish caught in the UK exclusive economic
zone. Applying this allocation method, Ireland would become the main beneficiary of prefinancing,
with nearly a quarter (€991 million) of the envelope, followed by the Netherlands (€714
million), Germany (€429 million), France (€396 million) and Belgium (€305 million).
“The BAR is an important funding initiative which aims to help mitigate the negative impact of
Brexit on the EU Member States’ economies”, said Tony Murphy, the Member of the European
Court of Auditors responsible for the opinion. “We consider that the flexibility provided by the
BAR should not create uncertainty for Member States.”