BRUSSELS, Feb. 21 (Xinhua) -- Leaders of European Union (EU) states will gather in Brussels on Friday to debate how to pick the next president of the European Commission, and how to make up for the budget shortfall in the post-Brexit era.

As the issues debated will only come into play after Britain's withdrawal of the bloc, the informal summit will be held in an EU27 format without the participation of Britain.

High on the leaders' agenda is whether to retain the so-called "lead candidate" system to pick the next president of the Commission.

Under the "lead candidate" system, each political group in the European Parliament (EP) nominates a candidate for the top-tier post in the run-up to the EP election.

The candidate of the party group which scoops the most seats in the EP is to be nominated by the European Council and approved by the EP by a majority of votes.

The "lead candidate" system, firstly put into place in the 2014 EP election, is not enshrined in the 2009 Lisbon Treaty, which only ambiguously stipulates that the European Council should propose to the EP a candidate "taking into account the elections to the EP and after having held the appropriate consultations."

A number of EU states have raised eyebrows at the "lead candidate" system, worrying that "the pool of potential candidates would become more limited, and the politicization of the Commission," according to a note released by the European Council Wednesday.

However, Commission President Juncker, who as the lead candidate of the European People's Party secured the post in 2014, has recently thrown his weight behind it. Speaking at a press conference last Wednesday, Juncker argued that the winner of the candidate has a "double legitimacy" with the endorsement from the European Council and the EP.

EP SEATS LEFT BY BREXIT

Another sticking point set to be discussed at Friday's meeting is the allocation of seats in the EP after Britain leaves the bloc.

The EP has proposed that the 27 of the 73 seats currently allocated to Britain be redistributed to 14 member states "to reflect demographic changes." The EP also suggested cutting the number of EP seats from 751 to 705.

An alternative to the EP proposal is to create a "transnational list", which "is not without merit," wrote European Council President Donald Tusk in the invitation letter to EU27 leaders on Wednesday.

But the idea is put on the back burner as it would "require modification of the Electoral Act, which must be adopted at least one year before the elections," according to the note released by the European Council.

The "transnational list" also requires the unanimity of EU member states, the EP's consent and the approval by all the national parliaments.

Apart from the two institutional issues, EU leaders are set to discuss the post-2020 Multinational Financial Framework (MFF), the EU's long-term budget.

The soon-to-be-27-member bloc is at pains to fill the huge budget gap caused by the withdrawal of Britain, which is the third-largest net contributor to the EU budget, following Germany and France.

"This shows the seriousness of the challenges ahead." wrote Tusk.