Brexit bill of €100bn cannot be enforced, say EU’s lawyers

A MASSIVE €100billion Brexit bill is “legally impossible” to enforce, the European Commission’s own lawyers have admitted.

The Sunday Telegraph has seen minutes of internal deliberations circulated by the Brussels Brexit negotiating team that had warned against pursuing the UK for extra payments.

But member states appear to have ignored the Commission’s own advice by demanding €100billion (£85billion) from the Government – a sharp hike in the original demand of €60billion.

The inflated bill has deepened the rift between Brussels and Downing St. A leaked report of a No10 dinner with European Commission president JeanClaude Juncker accused Theresa May of living in “another galaxy”, prompting the Prime Minister in turn to accuse EU politicians and officials of seeking to disrupt the election.

The Sunday Telegraph has also learnt that Britain has called in an international peace negotiator to counter growing hostility from Brussels. Ministers asked William Ury, a Harvardbased US negotiator, for help after he played a key role in ending the 52-yearlong civil war in Colombia.

The row over extra payments demanded by Europe arises from a refusal by the Commission to offset any final bill against the value of EU assets that are effectively part-owned by the

UK. Brussels is also demanding Britain continues to pay farm subsidies until the end of 2020, almost two years after Brexit.

But both of these moves fly in the face of European Commission warnings to EU member states that such demands could undermine the legal foundation for the final settlement.

The Commission’s initial position – now apparently overruled by EU leaders – would appear to support British contention that the European demands on Britain’s “debt” are legally flimsy and wildly overstated.

At a Brexit seminar in February held by Michel Barnier, the EU’s chief Brexit negotiator, three member states – Ireland, France and Germany – demanded that the UK’s share of EU assets should not be included in calculations of the Brexit settlement.

According to minutes of the meeting seen by The Telegraph, Nadia Calvino, the director-general in charge of the budget, rebutted the idea. EU assets are listed in it’s annual accounts, which is the legally watertight basis for calculating Britain’s final bill. At the seminar, she warned that if Europe began “cherry-picking” which parts of the annual accounts it wanted to base its own calculations upon, then Britain would be justified in doing exactly the same.

“Calvino was very clear. The only ‘legally defensible’ approach was not to ‘cherry-pick’ the annual accounts,” said a senior EU diplomatic source. “She could not see how the EU could justify taking into account all the UK’s commitments, but not a share of the assets.” In a separate legal memo, sent a month ago and seen by The Telegraph, the Barnier task force warned it would be “legally impossible” to insist Britain keeps paying for farm subsidies after March 2019. Commission lawyers explained that because farm payments only become legal obligations when the annual EU budget is agreed, Britain cannot be forced to pay them after departure from the EU.

Team Barnier also warned internally that if member states – led by France and Poland – demanded the farm payments after Brexit, it would give the UK the “perfect excuse” to walk away from the budget talks because the European side was breaking its own rules. That argument now appears to have been overruled.

“It was the clear view of the Commission that it would be legally impossible to defend the idea that the entire seven-year budget plan was a binding commitment on the UK, and that insisting the UK pay after Brexit would give them an excuse to walk,” the senior EU source said.

The EU lists some €22.5 billion worth of assets, but these items are worth considerably more at market rates. Taking into account the value of loans and other cash holdings, total EU assets have been valued at €153.7billion by the Bruegel think tank. Although not owned by member states, the UK, expects to be able to “net off ” its share of those assets against any Brexit bill. Fearing EU farms could be left short of subsidy after Brexit, several EU countries including Poland, Hungary, Italy, Spain, and France want Mr Barnier to demand the UK continue farm payments.

The decision to draft in Mr Ury as a negotiator indicates the level of hostility expected. Mr Ury specialises in hostile and emotional conflicts and advises parties on how to turn the other side’s anger against them. The Department for Exiting the European Union confirmed that officials had already held a meeting with Mr Ury, who is a cofounder of Harvard’s Program on Negotiation.

‘It was the clear view of the Commission that it would be legally impossible to defend the idea...’