Monday

18th Jun 2018

UK will have to pay beyond Brexit, EU warns

  • Oettinger said the EU budget could be reinforced by new payments and cuts as the UK leaves the bloc. (Photo: European Parliament)

The EU's budget commissioner has warned that the UK would have to pay into the EU’s coffers until at least 2020, even after it has left the bloc in March 2019.

Guenther Oettinger told the German newspaper Bild on Monday (7 August) that Britain is obligated to honour commitments it has made to the EU’s long-term programmes.

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The commissioner confirmed earlier calculations that the UK would have to pay even after Brexit, as some of the programmes and funds, which Britain has committed to, run on after 2019.

In May, the European Commission outlined its position on the single financial settlement the UK needs to pay to settle its bills before leaving the EU.

In it, the commission argued that the settlement should include the EU budget, funds, facilities and EU bodies the UK has to paid into.

It also mentioned that the UK, for instance, should continue financing teachers it sent to European schools around the continent until the end of the academic year - ending in 2021.

EU officials also pointed out that the UK would have to pay beyond 2019, as obligations stemming from EU cohesion funds could extend until 2023, when the final bills come in from the programmes.

The German budget commissioner said the holes in the EU budget caused by the UK’s exit from the bloc could be filled up by extra payments from member states and budget cuts.

He said the annual loss to the budget would be €10-12 billion.

Oettinger told Bild that he expected Germany to face extra costs in the single-digit billion-euro range.

40 billion

The commissioner’s comments come as the Sunday Telegraph reported that the government in London is ready to pay €40 billion if the EU agrees to negotiate the financial settlement as part of the deal on future relations - including a trade deal.

An EU source told EUobserver that one of the stumbling blocks over the financial settlement in the Brexit talks is that the UK sees the financial settlement as a way to pay for what it will get from the EU in a future deal.

The EU, however, sees the financial settlement as part of the divorce, and obligations that stem from commitments prior to the UK holding the Brexit referendum last June.

The 40 billion sum was dismissed by Downing Street sources, speaking to the Guardian. Several Conservative MPs questioned the need to pay at all.

Britain’s Brexit minister, David Davis, only acknowledged last month that the UK would honour those earlier commitments, but did not go into the details.

But the UK has so far failed to come up with its own position on how and what it would want to pay as it leaves the EU.

The EU’s chief negotiator, Michel Barnier, told EU ambassadors earlier that the lack of a UK position on the financial settlement is one of the main obstacles to any progress in the Brexit talks.

He told representatives of EU member states that the self-imposed deadline of October - to find an agreement on the key issues - is unlikely to be reached if the talks proceed at the same pace as they have so far.

Only when “sufficient progress” has been made on the financial issue - along with citizens’ rights and the border between Ireland and Northern Ireland - can talks move onto their next phase, including trade talks, the EU argues.

The bloc's position paper makes no mention of a sum for the financial settlement and says that the exact method of calculation should be agreed in the first phase of negotiations.

It adds that the schedule and the modalities of the payments should be defined in the second phase of the talks.

Earlier figures of between €60 billion and €100 billion have circulated in the media.

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