European financiers will today discuss a plan to raid €56 billion from the European Central Bank’s (ECB) revenues to fill an EU budget gap left by the UK leaving the bloc.

A proposal to channel ECB revenues from printing banknotes in 19 national central banks directly to EU coffers, will be discussed by the European Commission during its weekly meeting today.

Under the plan, an estimated €56 billion will be raised for the next EU budget from 2021-2027, to bridge a gaping hole in the economy after their biggest net contributor leaves the bloc in 2019.

A number of other options for sources of revenues will also be on the table, such as a EU plastic tax, levied on the production and disposal of plastic packaging.

The plastics plan outlined by budget commissioner Günther Oettinger in January could also help reduce the volume of plastic waste in Europe, he said.

In a statement, the ECB said that any alterations to the profit distribution model would require revisions of the legal code of the bank’s statute:

“Together with their own profits, the national central banks distribute it, according to national legislation, to their shareholders which are the finance ministries,” the bank said in a statement.

The decision for structuring of the common budget is then up to national governments to decide, it added:

The respective ministries and governments decide what they do with that money.

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Why it matters:

The EC’s budget talks are becoming one of the most contentious battles of 2018, as financiers try to plug a €13.9 billion hole left in the annual budget after its departure in March 2019.

The new budget will have to account for an estimated €97.3 billion lost from UK contributions over the seven years of the new budget from 2021-2027.

Brussels will have also have to debate whether to bridge the gap with new revenue streams, such as the ECB profits, or by trimming expenditures on things like regional aid and agriculture.

The EU budget is traditionally financed by member state contributions, with about 20% coming from the EU’s own revenue streams, such as VAT and customs duties.

Brussels has been trying to convince members to up their net contributions in the 2020s.

Today’s discussion will also help to form the basis of the EU’s budget plan, that will be announced in the commission’s formal budget proposal that will be presented in early May.

Background:

ECB financiers started the current budget debate in February, with optimists hoping it will be concluded by the European Parliament election in June 2019, while pessimists are hunkering down for the long-haul.

The annual EU budget was around €155 billion in 2016, and is expected to exceed €1 trillion in the seven-year budget starting from 2021.