Wednesday

14th Nov 2018

EU agency stuck with London rent bill

  • Canary Wharf is one of Europe's most expensive areas (Photo: EUobserver)

The European Medicines Agency (EMA) will be stuck paying millions in rent for its London building long after the UK is likely to have left the EU.

The agency’s contract in the Canary Wharf business district obliges it to pay the rent until 2039 because it has no early termination clause, the European Parliament said in a draft report.

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The report, which is up for a vote on Thursday (27 April), estimated that the rental cost from 2017 until 2039 would be €347.6 million.

The UK is expected to leave the EU in March 2019.

The rental issue was flagged up during the EU parliament’s annual audit of EMA spending.

The budgetary discharge and an attached resolution on the rental issue will be put to a vote in a plenary session on Thursday.

The draft parliament text noted that the rental agreement was signed in 2011, “when a potential exit of the UK from the Union was not foreseeable”.

But Dutch anti-EU MEP Olaf Stuger said the rental contract was naive.

“Everyone knows you should not agree to a rental obligation of 30 years without a cancellation clause,” he told Dutch newspaper De Telegraaf, which first reported the rental affair on Thursday.

It remains unclear who will foot the bill in the end.

The draft EU parliament report noted that “the costs associated with the relocation would reasonably be expected to be considered in the negotiations on the withdrawal agreement between the Union and the UK government”.

The EMA’s move from another location in Canary Wharf in 2014 already prompted controversy at the time.

The EU parliament's budget committee said the EMA headquarters should not have stayed in “one of the most expensive areas of the most expensive city of the European Union”.

The costs for moving out of the old building were estimated at €37.4 million, but the agency said those were offset “as the annual expenditure for the new office space is expected to be lower than in its current premises”.

That offsetting of costs assumed that EMA would use the building until at least 2024, not the 2019 UK exit date, however.

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