EU to demand that Britain pays €50bn divorce bill
Senior EU sources claim that Britain must double Theresa May’s offer before trade talks can begin
EUROPE will demand that Britain pays more than double Theresa May’s €20billion offer to break the deadlock in Brexit negotiations, senior European diplomats have warned.
The final Brexit “divorce bill” is expected to be at least twice this amount, and Britain would need to issue an agreement-in-principle on this to begin trade talks, senior EU diplomatic sources confirmed to The Sunday Telegraph.
The uncompromising line from Brussels, Berlin and Paris came after Theresa May’s speech in Florence on Friday in which she announced that Britain “will honour commitments” made during its EU membership.
It was backed in public by Emmanuel Macron, the French president, who said that Mrs May’s speech – welcomed as “constructive” by the EU’s chief negotiator – had not fundamentally changed the EU’s demands.
“Before we move forward, we wish to clarify the issue of the regulation of European citizens, the financial terms of the exit and the question of Ireland,” Mr Macron said.
“If those three points are not clarified, then we cannot move forward on the rest.”
EU sources said that “material clarification” of Mrs May’s often ambiguous and contradictory speech in Florence would be the priority when 100 British officials return to Brussels tomorrow to re-open talks.
On the question of money, the EU is clear that a British offer to continue paying into the EU budget in 2019 and 2020 during a two-year transition period – payments amounting to roughly €20bn (£18bn) – will not cover the ‘bill’.
“This is just a payment for the remaining financial framework period,” Ales Chmelar, the Czech secretary for European affairs, told the BBC, warning the final divorce settlement would be much higher. “This is not a payment for all the legacies that we see, including for example the pensions and the legacies in terms of grants and funds,” he added.
While European negotiators do not expect the UK to agree to specific figures, it wants absolute certainty about which commitments the UK is prepared to honour in order to arrive at a “methodology” to calculate a final bill, expected to be “about €40bn-€50bn”.
Privately, EU negotiators continue to take a hard line on the financial settlement as EU member states prepare to open negotiations on a new seven-year budget cycle after 2020, when the UK’s net €10billion-a-year annual payments will be absent.
One said that Mrs May’s pledge to “honour” past commitments might have “opened the door” to trade talks, but a second expressed doubt that negotiations would produce sufficient specifics next week to satisfy the EU.
Despite Mrs May’s intervention, EU diplomats continue to express scepticism that the UK will achieve “sufficient progress” in the talks by next month, as originally planned.
However, a special summit to discuss the Brexit negotiation could be held in November if next week’s talks generate sufficient confidence between the two sides, diplomats added.
On other areas of Mrs May’s speech, European negotiators continue to express extreme scepticism, particularly over the lack of clarity when it comes to solving the problem of avoiding a hard border with Northern Ireland.
They also attacked Mrs May’s calls for a “creative solution” to the EU-UK relationship after she rejected both the available EU models – a Norway-style membership of the European Economic Area or a Canada-style free trade deal.
The British were mistakenly attempting to be treated “as equals” with the EU, and were failing to recognise the disparity in population size and economic heft between a single country and a trading bloc of 450m people, said a diplomat involved in the talks.