BRUSSELS (Reuters) - Britain's exit from the European Union and new challenges the bloc is facing will force changes to the way it collects and spends its joint budget, the European Commission said on Wednesday, outlining five potential scenarios.
"The gap in EU finances arising from the United Kingdom's withdrawal and from the financing needs of new priorities need to be clearly acknowledged," the Commission said in a reflection paper that will be discussed by governments this year.
"In the future, migration management, internal and external security, external border control, the fight against terrorism and defence will need to be budgeted ... alongside continuing investment to support stability and sustainable development in our partner countries," it said.
In a clear reference to Poland, one of the biggest beneficiaries of the EU budget and also the only country against which the Commission has opened a procedure over the rule of law, the paper said:
"There have been new suggestions in the public debate to link the disbursement of EU budget funds to the state of the rule of law in Member States," it said.
Poland has been ignoring the Commission's recommendations under the rule of law procedure, which call on the nationalist-minded government to respect the independence of the judiciary, media and civil rights, raising concern of other EU governments.
"Respect for the rule of law is important for European citizens, but also for business initiative, innovation and investment, which will flourish most where the legal and institutional framework adheres fully to the common values of the Union," the Commission said.
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"There is hence a clear relationship between the rule of law and an efficient implementation of the private and public investments supported by the EU budget," the paper said.
(Reporting By Jan Strupczewski; editing by Philip Blenkinsop)