Alimony or acrimony – what price UK’s divorce from EU?
Will Britain be writing cheques to Brussels for a long time to come? After all, the EU has assets that the UK could claw back as part of the breakaway settlement. Political Editor David Williamson discusses the hot topic
How much should Britain pay in the divorce settlement to leave the EU? Theresa May is due to trigger the start of two years of intense negotiations next month when she formally notifies the EU of Britain’s intention to leave.
She wants to negotiate a new trading relationship with the EU to ensure that jobs, exports and growth do not take a colossal hit. But the leaders of the remaining 27 EU member states will also insist that the UK commits to paying billions of euros in a divorce settlement.
Michel Barnier, the EU’s chief Brexit negotiator, is expected to demand €57bn (£48bn) from the UK.
European Commission President Jean-Claude Juncker this week warned that the UK faces a “very hefty” bill.
The UK’s negotiating team can also take a tough stance in the coming talks. If there are demands for Britain to continue to pay for liabilities, it can also demand a share of the assets.
There could be a fight over wine and art.
The Financial Times reported that Britain’s divorce lawyers are eyeing up the “EU’s 42,000-bottle cellar of wine, cognac and other spirits, its art collection and its €8.7bn property portfolio”.
A Welsh Conservative spokesman said the EU has assets of more than €150bn, of which Britain is entitled to a share.
Why should the UK have to pay anything at all?
Theresa May said in her landmark Lancaster House speech that “the days of Britain making vast contributions to the European Union every year will end”.
The EU’s spending has already been planned for the years 2014 to 2020. A key question is whether the UK will have to contribute even if Britain leaves before the end of this period.
A House of Commons Library briefing points out there is an argument for continuing to pay in during this time.
This could help secure a “more orderly exit” and would “mean that the UK could continue to receive EU funding agriculture and economic development, which would give the UK more time to replace the funding schemes with its own funding”.
Will the UK pay a share of longterm spending commitments?
A major analysis of the Brexit Bill, published by the Centre for European Reform (CER) and compiled by the FT’s Alex Barker, suggested the UK could be left “on the hook for its share of the €143bn of cohesion and rural development spending executed after Brexit”.
A key issue is that Eastern European countries will be expecting billions in structural funds but if the UK does not contribute towards this then other member states will have to pay a bigger share.
The CER notes: “Poland stands to receive €82.2bn in 2014-20, and €23.1bn will be paid respectively to Hungary and the Czech Republic”.
The issue boils down to this: “Netcontributors do not want to pay more, and net-recipients do not want to lose out.” Both the rich and the poor countries of the EU will be worse off if the UK can secure a divorce without paying significant alimony.
Overall, the EU faces a €241bn bill for projects that have “yet to be paid” under its “reste à liquider” (RAI) system of accounting.
According to the CER report: “More than half is made up of cohesion spending, and a fifth each by research and agricultural spending... Britain’s share of the RAL, based on its typical contribution rate, would be around €29-36bn.”
If Britain does not contribute towards these projects the union could face a financial crisis and a season of intense internal rows.
What happens if a European satellite crashes?
Politico’s Florian Elder warned: “Britain could be on the hook for bills from the EU for many years to come. Take space.
“One of the few legal principles in outer space, enshrined in Article VII of the Outer Space Treaty of 1967, states that if you send something up, you must take care of it until it comes down...
“The EU’s four most recent satellites were sent into a medium-Earth orbit in November last year... The satellites are intended to stay up in space for at least 12 years.
“Then, if nothing goes wrong, they’ll burn up when re-entering the atmosphere. But what happens if one of them doesn’t melt, if a piece comes down and falls through someone’s roof?”
He added: “Britain and the EU