(Bloomberg) -- Denmark is setting aside 700 million kroner ($110 million) to cover extra payments to the European Union in case the U.K. leaves without an agreement on its future relationship with the bloc.
Denmark's contributions to the EU are expected to total 22 billion kroner next year, assuming there's an accord on Britain's exit, according to the 2019 budget that Finance Minister Kristian Jensen presented on Thursday in Copenhagen. But costs will rise instantly if a deal isn't reached, Jensen said. The additional payment would occur every year until at least 2022, according to the budget draft.
“We don't expect Brexit to materially impact the 2019 budget structurally, so the budget will be stable and reliable. But what actually will happen is that our payment to the EU may change if we get a hard Brexit,” Jensen said.
Read more: Denmark Will Limit Spending in 2019 Budget, Document Shows
However, the biggest cost for the Danish government may be the loss of a key political ally in Brussels, Jensen said.
“Through 2019 and maybe into 2020 we'll be negotiating the EU budget for years to come and we'll be missing the voice of the U.K. when advocating fiscally responsible spending,” he said.
The finance minister said he doesn't have an estimate on the actual cost of a so-called hard Brexit for the entire Danish economy. “It will mean a great deal,” he said. “There's no way around that.”
To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net
To contact the editors responsible for this story: Christian Wienberg at cwienberg@bloomberg.net, Nick Rigillo
©2018 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
