€60 billion is a pretty hefty bill. That’s the amount Britain will owe the EU after Brexit, according to unnamed sources within the European Commission. Considering that so much fuss was made over the figure of £350 million a week (roughly €20 billion a year) during the referendum campaign, the British public presumably aren’t going to want to cough up over three times that amount as part of the divorce bill.
Some caveats do apply. This would be a one-time payment, though it does not include any ongoing contribution that the UK might pay in order to have access to various EU programmes after Brexit. Crucially, it could also be seen as an “opening bid” during the negotiations. The actual number is likely to be lower.
Nevertheless, somebody has to pay the bill. If the British refuse, then the remaining 27 will have to go to their citizens and explain that their obligations to the EU budget are due to go up instead. That means less money for domestic spending, which may prove to be a politically impossible task.
So, where does the figure of €60 billion come from? To get an idea, we spoke to Professor Iain Begg, Professorial Research Fellow at the European Institute of the London School of Economics and Political Science:
It’s possible to reach the 60 billion euro figure that has come out from various sources inside the Commission – mainly unattributed – by reference principally to the EU budget for the period 2014-2020. There’s an expectation that Britain would fulfil it’s obligations for the entire 7-year framework, and not just for the years during which it remains a member of the European Union.
In particular, that means that from the second quarter of 2019 onward, by when we’re expecting Britain to be out of the EU, there will be seven quarters left of that budgetary framework. Within that, there could be commitments by Britain that will have to honoured in 2019 and 2020.
In addition, there’s also something called in French ‘reste à liquider’ (meaning ‘remaining to be liquidated’) which is the bills for EU spending that is committed prior to Britain leaving the European Union, but is only presented afterwards. That can happen particularly because of what is called ‘cohesion policy’; economic spending in Central and Eastern Europe which is likely to continue up to 2023, even with commitments being made today. The last element in the story is obligations towards the pensions of EU staff, which could go as high as 9 or 10 billion.
We had a comment sent in from Roy, who thinks the idea of any sort of ‘divorce bill’ for Brexit is nonsense. He argues the UK should “NOT have to pay ANY money to the EU after exit.”
To get a response, we took Roy’s comment to Roger Helmer, MEP for the pro-Brexit UK Independence Party (UKIP). What would he say?
To get another perspective, we also put Roy’s comment to Robert Ackrill, Professor of European Economics and Policy, Nottingham Trent University. What would he say to Roy?
Well, the great unknown here is the legal standing of the financial commitments we have already entered into. And, unfortunately, whilst the 7-year budgetary plan has clauses around new countries joining and around the reunification of Cyprus, there’s no clause in there as to what happens when a country leaves.
Now, on the one hand you could say that Article 50 contains no legal commitment to spending obligations already entered into… but then Article 50 contains very little indeed anyway. Then there’s the legal standing of those policy-areas where we have already committed ourselves.
So, one can argue – as Roy and others have done – that the UK should not pay anything. However, I think this is where the lawyers would have to get stuck into the legal basis of that argument. Also, any meaningful negotiation can’t be one party just standing there and saying: “Right, we’re going to do this, this, and this, and we’re going to walk away without any kind of consequences.”
Let’s face it: the 27 remaining countries of the EU will hold a lot of cards in the negotiations. A failure to engage constructively with those talks would have potentially serious consequences that would, in the long-term, cost a whole lot more than a few billion euros here and there.
Should the UK pay its Brexit ‘divorce bill’? Is the mooted figure of ’60 billion’ fair? Or is it grossly inflated? Should Britain refuse to stump up the cash? Let us know your thoughts and comments in the form below and we’ll take them to policymakers and experts for their reactions!