Leaders to discuss EU money, top jobs after Brexit

By Jan Strupczewski

BRUSSELS (Reuters) - Money and top jobs will be the main topics of an informal summit of 27 European Union leaders on Friday, as the bloc tries to deal with the consequences of Britain's exit from the EU in 2019.

EU leaders except Britain are to say whether they agree to increase the EU's next seven-year budget to pay for common policies on security, defence and migration, even though Britain's departure will leave fewer net contributors.

They are also due to say if they would agree to give the European Parliament a bigger voice in choosing the next head of the EU's powerful executive, the European Commission, and what to do with assembly seats vacated by British deputies.

"The informal summit on Friday will kick-start the debate on the EU after Brexit, both on institutional issues as well as on the budgetary framework," a senior EU official said.

"All the decisions that will be prepared by this summit will enter into force only once the UK leaves the European Union," the official said.

The European Commission wants leaders to increase the next long-term budget, which will finance the EU's joint policies from 2021 to 2027, to 1.1-1.2 percent of EU GDP from 1.0 now.

To cover the roughly 10-billion-euro-a-year hole that will be left by Britain's exit, the Commission has proposed a mix of spending cuts and tapping new sources of revenue.

Germany, already the biggest net contributor to the EU budget, has said it would be ready to pay even more, but other countries, like the Netherlands, have ruled out higher payments saying a smaller EU implied a smaller budget.

"The EU budget has been pretty divisive and will remain so even without the UK around the table," the official said, warning there would be no agreement on a number on Friday.

"A majority of member states would support an increase in the EU budget, but those who are sceptical, or against, are very determined and maybe more determined than those who are for," the official said, noting talks were only starting now.

"We will not have a consensual view on Friday."

LEAD CANDIDATE DISPUTE

Apart from how much to spend and on what, the leaders will also have to solve more procedural issues like how much time the EU should give itself to agree on that.

The Commission would like an agreement on the budget by the next European Parliament elections in May 2019, but many EU leaders see such a time-frame as unrealistically short given that the current budget took 29 months to negotiate.

The result could be that major progress in the budget negotiations will be made by May 2019, but a final deal will only be clinched with the new European Parliament later.

The leaders are likely to agree with a European Parliament proposal to cut the number of seats in the legislature to 705 from 751 after 73 British deputies leave the parliament and some of their seats are re-distributed among other EU members to account for demographic changes.

But the leaders are also likely to reject a European Parliament demand that the leaders choose the next head of the European Commission only from among lead candidates chosen by the main political groups in the legislature.

"It will be up to (EU leaders) to decide, also taking into account other treaty obligations, it will be an autonomous decision by the European Council," the official said.

"Becoming a lead candidate (of one of the European Parliament parties) does not eliminate you from the race (for Commission president), it might increase your chances, but it cannot be, and will not be, a guarantee of becoming the president of the Commission," the official said.

(Reporting By Jan Strupczewski, Editing by William Maclean)