Britain Puts on Paper There Will Be Financial Settlement With EU

EghtesadOnline: The U.K. acknowledged for the first time on paper that it will have to pay money to the European Union when it withdraws from the bloc, seeking to damp down a row over the country’s so-called Brexit bill.

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14 July 2017

“The government has been clear that we will work with the EU to determine a fair settlement of the U.K.’s rights and obligations as a departing member state,” Brexit Secretary David Davis said in a statement to Parliament that referred explicitly to the “financial settlement” with the EU. “The government recognizes that the U.K. has obligations to the EU, and the EU obligations to the U.K., that will survive the U.K.’s withdrawal — and that these need to be resolved.”

Britain’s so-called exit bill is one of the thorniest issues in the Brexit negotiations, with media speculation putting the fee as high as a gross 100 billion euros ($114 billion). Prime Minister Theresa May needs to come to an accommodation with her EU counterparts on the payment, because it’s one of three areas, alongside citizens’ rights and the border with Ireland that the EU is demanding “sufficient progress” on before the discussions can move onto Britain’s future relationship with the bloc, according to Bloomberg.

Negotiations resume on Monday in Brussels amid signs May’s government is willing to make concessions on previous hard-line positions.

Davis told the BBC on Thursday that the U.K. may seek associate membership of the nuclear oversight treaty it’s pulling out of amid signs of a rebellion within his own Conservative Party. The government is nevertheless still vowing to end the European Court of Justice’s jurisdiction in the U.K. and remains at odds with the EU on the topic of citizens’ rights.

‘Go Whistle’

The statement on the bill contrasted with the more bellicose tone employed by Foreign Secretary Boris Johnson this week. Answering questions in Parliament, he agreed with euro-skeptic Tory lawmaker Philip Hollobone who suggested the foreign secretary should “make it clear to the EU that if it wants a penny piece more” from Britain as part of the Brexit settlement, “it can go whistle.”

Johnson responded that “the sums that I have seen that they propose to demand from this country seem to me to be extortionate, and I think that to ‘go whistle’ is an entirely appropriate expression.”

EU negotiator, Michel Barnier, said in response that “I am not hearing any whistling, just a clock ticking" down to Britain’s March 2019 withdrawal.

Luxembourg Prime Minister Xavier Bettel said on April 29 that the sum would be between 40 billion euros and 60 billion euros. EU negotiator Michel Barnier hasn’t publicly endorsed a number and argued he is only asking the U.K. to cover financial commitments it made as member of a bloc, which may extend beyond 2019.

While the language of the statement is dry, it’s the first time Britain has said in writing that it accepts the need to pay a financial settlement. In the past, some officials have questioned whether the U.K. has any legal obligation to pay anything and suggested it could make a claim on EU assets. May in the past has said the U.K. has “obligations” and also “rights.”

When May wrote to European Council President Donald Tusk in March to officially trigger two years of Brexit discussions, she referred to it obliquely, saying “we will need to discuss how we determine a fair settlement of the U.K.’s rights and obligations as a departing member state.”

The U.K.’s Office for Budget Responsibility said on Thursday that the bill was unlikely to “pose a big threat” to the government’s finances.