Thursday

21st Feb 2019

EU hopes for clarity on Brexit payments

  • May expected to walk fine line between Tory eurosceptics and EU-27 expectations (Photo: Number 10/Flickr)

EU officials are hoping for signs from prime minister Theresa May, in her upcoming speech in Florence this Friday (22 September), that the UK is willing to pay its financial obligations to the EU.

They are looking for concrete messages that could help kick start Brexit negotiations that have stalled after three rounds of talks.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • Johnson challenged May this week (Photo: Council of the EU)

"Everyone is eager to see [the speech]," an EU official conceded when talking to EUobserver on the condition on anonymity.

"The key element is the financial settlement, to see that they will contribute at least until the end of the multi-annual financial framework," the official said, referring to the EU's seven-year budget, which ends in 2020.

"The question is how far she will go," he added.

This will be May's first detailed speech on Brexit since January, when she also announced the UK would be leaving the single market and the customs union.

It is not clear if May is going to the mention specific sums she intends to pay to the EU, although the Financial Times reported on Tuesday that the prime minister would say the bill is at least €20 billion.

"The expectation is that she is going to be making an offer on the financial settlement for a transitional period," Tim Bale, a professor of politics at Queen Mary University of London, told EUobserver.

Bale added May seems to have struck a compromise with eurosceptics in her party - that there would be no payments beyond a transitional period - and that could buy her some time with the fierce anti-EU forces in her party.

"It [the speech] seems be a chance for her perhaps to accelerate the negations, that are seem to be running into the sand," he said.

In Brussels, there is a need for clarity from the UK side.

"I see a problem in the politics of Westminster - lots of illusions out there," another EU official said, adding that: "We hope reason will prevail, which would be good for everyone."

"But this is primarily a challenge for May and her party," the official warned.

Just how limited her authority is in London was highlighted over the weekend, when her Brexit policy was openly challenged by foreign minister Boris Johnson in an opinion article he published in the Telegraph, without any retribution.

"May's position is very weak domestically. [The Johnson episode] laid bare the reality that she is a prisoner of eurosceptics within her party, and her own failure at the election," Bale said.

But no matter the substance of the speech, EU officials think it is highly unlikely that the EU's chief negotiator, Michel Barnier, can report "sufficient progress" to the leaders of member states at the EU summit in October.

"Sufficient progress" on the financial settlement, citizens' rights and the Irish border issue are preconditions for moving the talks to their next phase, on future relations with the EU.

Officials point out, however, that October was a self-appointed deadline to make sure talks were on track, but it is not laid down in any of the negotiating guidelines or papers.

Nevertheless, October could be a turning point.

"Then [if no sufficient progress is achieved], the blame game can start on who is responsible for the failure," the first EU official said.

"At a certain point, we need a crisis to increase pressure and move on with the talks in substance," the official added.

"Show me the money"

Large differences remained between the UK and the EU approach to the financial settlement after the last round of talks.

And frustrations with the lack of a clear UK political position on payments were clear at the press conference in August.

"In July, the UK recognised that it has obligations beyond the Brexit date," EU negotiator Barnier said.

"But this week the UK explained that these obligations will be limited to their last payment to the EU budget before departure. [...] After this week, it is clear that the UK does not feel legally obliged to honour these obligations after departure," he said last month.

"A proper approach is to go through, line-by-line, and see whether or not legal obligations are correctly clarified," retorted UK Brexit secretary David Davis at the time, telling reporters.

The EU treats all of the UK's obligations between the 2014-2020 EU budget cycle as a starting point, whereas the UK wants to go through each part of the budget to establish if they have to pay.

Another EU official explained that EU countries see the financial settlement as a sort of "down-payment that is bound to secure goodwill" on the part of the EU-27, once the two sides shift onto talks about the future arrangement.

Several EU officials told the EUobserver that the UK argued the EU budget - the multi-annual financial framework (MFF) that spans over a period of seven years - is merely a "planning instrument", and not a "legal instrument".

The EU side seemed baffled by this notion, as the Treaty of Lisbon outlines the MFF as a legally binding act.

"The EU wants the UK to prove why it does not owe money and the UK wants Brussels to prove why it does," an EU official said.

Moreover, the UK's legal argument is that it does not need to pay for items in the budget that have not yet been contracted.

So far, the UK has only committed to pay whilst the country is still an EU member, but refrained from accepting any liabilities beyond the Brexit date in March 2019.

Officials have pointed out that any extra payments are seen by UK negotiators as a way to pay for the benefits of the future relationship.

While EU officials say they understand that the money issue is very politically sensitive in the UK, they emphasise that this is where the EU-27 are probably the most united.

No net contributor wants to pay a single euro cent more into the already-agreed EU budget, and no recipient wants to give up what has already been promised through the laborious MFF negotiations in 2013.

"It is a priority for everyone," said an EU official.

Johnson challenges May on hard Brexit

In yet an another attempt at becoming Tory leader, the UK foreign secretary argues for a hard Brexit, while PM Theresa May is expected to set out her strategy, including a financial settlement with the EU, on Friday.

UK parliament passes Brexit bill

The EU Withdrawal Bill passed by 326 votes to 290 in the House of Commons, but Conservative MPs warned that controversial plans for the government to overturn EU laws by executive order would have to be scrapped.

UK dismisses €54bn EU bill report

David Davis denied report that the UK prime minister had agreed to an exit bill, saying the EU commission risked making itself look "silly".

May seeks EU grace period

Eagerly awaited Brexit speech was short on details, but May pledged to honour financial commitments while calling for a two-year transition deal after the UK left.

News in Brief

  1. Juncker pledges climate action alongside Swedish activist
  2. Swedbank brings in external help on money laundering revelations
  3. No-deal Brexit danger 'very serious', Corbyn says after Brussels meeting
  4. Tusk to back pro-EU candidates in Polish EP vote
  5. Germany rejects UK appeal on Saudi arms sales
  6. French senators decry 'dysfunction' on Macron security aide affair
  7. France to ban far-right groups over antisemitism
  8. Swedish climate activist to face Juncker in Brussels

Opinion

Lost in Brexit chaos - abortion rights in Northern Ireland

Labour MP Diana Johnson has brought a private members bill to Westminster that proposes to decriminalise abortion in the whole of the UK, which means that, if successfully passed, current provisions for Northern Ireland will also be repealed.

May on whistle-stop EU tour to seek new backstop pledges

The British prime minister dramatically delayed a parliamentary vote on the Brexit deal at the last minute, as she faced defeat. Theresa May will now speed-tour EU capitals to try to secure further political guarantees.

Stakeholders' Highlights

  1. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  2. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  3. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  4. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  5. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  6. Nordic Council of MinistersNordic ministers take the lead in combatting climate change
  7. Counter BalanceEuropean Parliament takes incoherent steps on climate in future EU investments
  8. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  9. Nordic Council of MinistersSeminar on disability and user involvement
  10. Nordic Council of MinistersInternational appetite for Nordic food policies
  11. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  12. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups

Latest News

  1. Microsoft warns EU on election hack threat
  2. Brexit talks to continue after May-Juncker meeting
  3. Trump and Kurz: not best friends, after all
  4. EU commission appeals Dieselgate ruling
  5. 'No burning crisis' on migrant arrivals, EU agency says
  6. 'No evidence' ECB bond-buying helped euro economy
  7. Juncker: Orban should leave Europe's centre-right
  8. College of Europe alumni ask rector to cut Saudi ties

Stakeholders' Highlights

  1. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  5. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. Nordic Council of MinistersThe Nordic gender effect goes international
  7. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. Nordic Council of MinistersNordic design sets the stage at COP24, running a competition for sustainable chairs
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Stakeholders' Highlights

  1. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  2. International Partnership for Human RightsCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  3. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  4. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  5. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  6. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  7. Mission of China to the EUChina: Work Together for a Better Globalisation
  8. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  9. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  10. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  11. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  12. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future

Join EUobserver

Support quality EU news

Join us