Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

EU to Press U.K. Over Brexit Divorce Bill

Posted by hkarner - 13. Juli 2017

Date: 12-07-2017
Source: The Wall Street Journal

Foreign Secretary Boris Johnson decries expectations as ‘extortionate’

U.K. Foreign Secretary Boris Johnson said the EU’s divorce bill expectations are ‘extortionate’ during a parliamentary debate on Tuesday.

BRUSSELS—European officials are set to press Britain to clarify its position in coming days on European Union demands that it settle a bill to leave the bloc, as U.K. Foreign Secretary Boris Johnson dismissed what he called the EU’s “extortionate” expectations.

EU officials have said the U.K. has legal commitments upward of €60 billion ($68 billion) of spending pledges. They have made the divorce bill one of several priorities that must be addressed upfront—along with citizens’ rights after Brexit and the situation in Ireland—before they are willing to begin discussions on a future EU-U.K. trade deal.

The clash over the financial settlement comes ahead of the start Monday of the second round of negotiations over the U.K.’s departure from the bloc. In recent days, European officials have voiced concerns that the U.K. is seeking to sidestep discussions on the divorce bill.
During a parliamentary debate in London on Tuesday, Mr. Johnson said Britain should tell the EU to “go whistle” if it repeats its demands for a large exit bill.

“The sums that I have seen that they propose to demand from this country seem to me to be extortionate,” Mr. Johnson said.

EU officials and diplomats involved in the negotiations say the EU’s chief Brexit negotiator, Michel Barnier, wants at least to touch on all the priority issues during next week’s talks. However, so far, Britain hasn’t set out its thinking and European officials are concerned British officials are looking to avoid the issue.

The “commission will talk about money,” one of the diplomats said. “We just don’t know what the U.K. will say.”

An EU official said Tuesday that “the hard work begins,” adding that the EU expects Britain “to engage substantially on all the” priority issues in next week’s talks. Any effort to brush aside the divorce settlement “won’t fly at all,” the official said.

A diplomat close to the negotiations from an EU country said he expected the U.K. would ask next week for greater clarity on the bases for the EU’s claims, but didn’t expect the U.K. to set out its own position.

The divorce bill has long been one of the most sensitive points in the Brexit discussions. While U.K. officials have said they would abide by their legal obligations, senior officials have dismissed calls for Britain to pay tens of billions of euros.

During last month’s one-day opening Brexit discussions, U.K. Brexit Secretary David Davis didn’t accept the EU’s legal case for the divorce bill, saying there were different legal views on the issue, according to officials involved in the talks.

The EU says the U.K. owes the money partly because of its commitments in 2019 and 2020 under the current EU budget period. However, the EU also contends that Britain has legally committed to pay its portion of future EU pension arrangements and for EU programs that have been promised but not yet delivered.

Mr. Barnier has said he doesn’t expect a divorce bill figure to be agreed in the coming Brexit talks but wants to settle on a methodology for calculating Britain’s commitments. However, some European diplomats say there needs to be significant flexibility left to come back and settle on a final figure once the Brexit negotiations move to a conclusion next autumn.

“There needs to be a mutual understanding of what the limits are on an eventual deal,” a senior diplomat said.

However, with EU countries facing a battle next year over agreeing a new multiyear budget for after 2020 without Britain’s large annual EU payments, there is a shared incentive among the 27 other governments for the U.K. to pay as much as possible.

Other large net EU contributors such Germany and the Netherlands have said they won’t pick up the British tab, raising the prospect of sharp cuts to future EU programs.

 

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