The European Commission will publish its draft seven-year EU budget later this morning.

It will be the first directly affected by Brexit, and it is thought the loss of the UK’s contribution will have a major impact on the scale and scope of the EU’s spending power from 2021.

Ireland’s priority will be to preserve funding for the Common Agriculture Policy.

Taoiseach Leo Varadkar has said Ireland would be prepared under certain conditions to increase its contribution.

Agreeing the EU’s seven-year budget is normally a gruelling process which takes between 18 months to two years of hard negotiation between the European Commission, the member states and the European Parliament.

This time round it will be even tougher. Brexit means an annual €12bn hole in the budget, notwithstanding the exit bill that London ultimately agrees to.

As such, some EU projects will be cut, and some member states will be asked to contribute more.

Programmes such as CAP and Cohesion Funds will face pressure, while the Commission wants to shift more money to the cost of handling the migration crisis, the digital economy and defence.

According to reports, the Commission wants to increase the so-called multi-annual financial framework to €1.25 trillion.

That would represent 1.11% of the combined gross national income of member states, up from 1% at present.

Such a target would almost certainly mean a significant increase to Ireland’s budget contributions.

The Taoiseach has signalled Ireland would be prepared to pay more to ensure the survival of cohesion and CAP funds, and to meet the migration challenges.

One of the most controversial aspects will be a potential link between the receipt of EU funds and countries observing the rule of law.

It follows growing anger in Brussels and other capitals at the authoritarian drift of countries like Poland and Hungary, which traditionally are major beneficiaries of EU funding.