Reports of €100bn Brexit bill utterly unhelpful for negotiations – 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.
“Recent reports estimate that the European Commission Brexit bill has increased to €100 billion due to the addition of post-Brexit farm payments and EU administration fees. The problem is that the first thing to be negotiated in the talks is the settlement of costs for the UK leaving.
“These reports of a €100 billion bill are utterly unhelpful. Putting such an over-inflated bill on the British could leave talks at a standstill from the start. 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. The new figure is substantially higher than previous estimates which were around €40-€60 billion.
“The first priority should be to establish a clear legal methodology to the calculation of the bill; this should not include a figure. Once both sides can agree to the method of calculation, it should be straightforward to decide on the final bill.
“Michel Barnier unveils his negotiating plans for the Brexit talks today, following adoption by all European Commissioners. Barnier will then seek a formal mandate from the EU 27 Member States on 22 May after which Brexit negotiations can officially begin.
“It’s not in Ireland’s interest to let talks get derailed at an early stage. We have to keep up the diplomatic effort and try to act as a bridge between both sides.
“The new €100 billion Brexit bill foresees the UK paying a share of EU liabilities, covering annual farm subsidies and administrative costs, which amount to €183 billion.
“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.
“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.
“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 €100 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|
|Post-Brexit farm payments and administrative costs||€183 bn||€27.4 bn|
|Total liabilities:||€660.2||€100.7 bn|
|NET TOTAL||€100.7 billion|
Source: Centre for European Reform