Germany may need to cough up an extra £10 billion to cover EU budget deficit.

German Chancellor Angela Merkel said Wednesday that talks to place the European Union’s budget for the coming seven years will be “very hard” in an extraordinary summit beginning Thursday.

Germany and Finland belong to the circle of northern European EU members that cover more into the EU budget than they get out, called “net contributors”.

These nations are eager to cap spending at roughly 1 percent of the bloc’s total GDP, while the European parliament has demanded 1.3 percent.

Brussels is eager to set priorities in climate change and other areas, even as Brexit has punched on a multi-billion-hole in EU finances.

“Even if we remain at the same level (of contributions), namely one percentage of GDP, that would mean Germany would cover 10 billion euros more per year because of inflation and Brexit,” Merkel said.

“If additional burdens are loaded on top, it is possible to see it is important, then we’ll have to see whether it is split fairly among the net contributors.”

Around 15 other member nations and France are keen to finish a system of rebates for five states — Germany, Denmark, the Netherlands, Sweden, and Austria — which has been diminished by the withdrawal of Britain.

EU – UK

Among the net contributors, a so-called “frugal four”, not such as Germany, is keenest to restrict the EU budget.

Less wealthy southern, central, and eastern nations fear this will mean cuts to traditional redistribution via policies such as aid.

As the bloc’s biggest economy, Germany’s donations account for around one-fifth of the EU budget, set to rise to 25 percent below plans for the coming seven years.

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