Brian Hayes MEP

Home » Statement » Slapping the British with an EU demand for €60 billion Brexit bill is unrealistic – Hayes

Slapping the British with an EU demand for €60 billion Brexit bill is unrealistic – Hayes

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Slapping the British with an EU demand for 60 billion Brexit bill is unrealistic – Hayes

The history of the British contribution to the EU Budget has been toxic and an early standoff could wreck the Brexit negotiations before they start. Remembering what Prime Minister May has said that no deal is better than a bad deal for the UK, it is not in Ireland’s interest for an acrimonious and incomplete settlement, said Brian Hayes MEP.

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“The European Commission argues that the U.K. will have to settle a bill of €60 billion worth of charges when it leaves the EU. The UK will contest this amount strongly. It’s crucial that the final amount needs to be fair and realistic for both sides.

“The first thing to be negotiated after Article 50 is triggered is the settlement of costs for the U.K. leaving the EU. Michel Barnier has said that this part of the negotiation could last until December, emphasising just how difficult this issue will be.

“The EU side, through Barnier, has already shot its opening gambit of a €60 billion bill which, frankly, is totally unrealistic. It is clear that the UK will have to pay a substantial bill but there needs to be fairness. The Commission could be setting the stage for a very dangerous stand-off and Ireland stands to lose if the talks simply fail at the first hurdle.

“Most of the Brexit bill will consist of unpaid EU budget appropriations. Because the EU budget is decided on a multiannual basis, the Commission believes that the UK must honour all the payments it committed to the budget even after it has left the EU. The Commission’s argument is that, under EU law, the UK entered into legally binding financial allocations that it must honour whether it’s in or out of the EU. This means that the UK could still be paying for structural funds in favour of other EU Member States up to 2023.

“It does not seem to make any sense that, post-Brexit, we would ask the UK to continue paying budgetary contributions as if it were still an EU Member. There needs to be fairness in these negotiations and also a recognition that the UK pay over 10% of the total EU Budget. As long as the UK is a member of the EU it should pay its budget commitments as normal, but it should not be bound to financial commitments after it has left.

“The other big part of the Brexit bill will be the pension bill for EU civil servants. The liability for pension benefits for EU civil servants stands at €63.8 billion. Mr. Barnier’s interpretation is that the UK has to pay its relative share of this bill. Based on the UK’s average contribution to the EU budget, they would have to pay 12% of the EU pension bill, or €7.7 billion.

“Of course, the €60 billion figure is an upper estimate of what the final bill will be. But the political reality is that a great deal of Member States will support this €60 billion figure. For net recipients, that €60 billion represents future structural funds that they were already promised and for net contributors, it means the less they will have to cough up to cover the UK’s expenses.

“Given the history of this issue in the UK and the short time span for the divorce negotiation, the Commission should be very careful as a Mexican standoff could occur which helps no one. Equally if there is no agreement, the British will simply stop paying and their share can only be matched by more financial contributions from existing contributor Member States, including Ireland, or a drastic cut in the EU budget.”

How the €60 billion is calculated:

Liabilities EU amount (end 2018) UK Share (15%)
Unpaid commitments until 2019 €241 bn €36.2 bn
Outstanding allocations after 2019 – cohesion funds €113 bn €17 bn
Outstanding allocations after 2019 – rural/fisheries funds €30.4 bn € 4.6 bn
EU pension liabilities €63.8 bn €9.6 bn
Connecting Europe facility €10.1 bn €1.5 bn
EFSI capital €16 bn €2.4 bn
European Development Fund €1.7 bn
Copernicus Programme €2.9 bn €0.4 bn
Total liabilities: €477.2 €73.3

 

Offset payments    
EU Assets €22.5 bn €3.4 bn
Receipts for UK projects (approx) €9 bn €9 bn
NET TOTAL   €60.9 billion

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