Brexit 'challenging' for EU budget: Merkel

FRANKFURT AM MAIN: Net contributor Britain's planned departure from the EU leaves the bloc's remaining 27 members with a "very challenging" budget hole to plug, German Chancellor Angela Merkel said Monday.

Policymakers will need to find between 12 and 15 billion euros ($15-19 billion) of savings or new cash to make up for Brexit, EU Budget Commissioner Guenther Oettinger has calculated -- even as the bloc faces new challenges like deepening defence cooperation, securing its borders against illegal migration or beefing up development aid.

Speaking at a Berlin press conference with Luxembourg Prime Minister Xavier Bettel, Merkel acknowledged that not all EU members share Berlin's openness to paying more into Brussels' coffers after Brexit.

"The Netherlands cannot accept an increase in their gross payments into the EU budget," Munich-based newspaper Sueddeutsche Zeitung reported Monday, citing an internal paper from the Dutch government.

Neither are Sweden, Austria, Finland or Denmark keen on paying more for membership.

Instead, after Brexit "a smaller EU should mean a smaller budget," the Dutch government paper insists.

Germany's willingness to contribute more to the EU budget is enshrined in the coalition pact that Merkel's conservatives and the centre-left Social Democrats (SPD) hammered out this month -- which still has to be approved by the SPD rank and file.

EU heads of state and government will meet Friday to discuss who should succeed Luxembourger Jean-Claude Juncker as the head of the European Commission and how to balance the books once Britain is gone.