Britain facing a hefty post-Brexit bill

The UK could be paying the EU for a long time to come...

Britain could be required to keep funding EU projects for four years after a Brexit deal is signed.

The European Commission is ready to slap the soon-be-former member state with a €60bn "Brexit bill", with the Daily Telegraph reporting that this will be paid in installments up until 2023.

This suggestion was made at a meeting between the EU's chief Brexit negotiator Michel Barnier and senior officials from the remaining member states in early February.

An EU diplomat with knowledge of the meeting told the paper:

"The Commission wants the UK to pay in installments from the day of departure in 2019 up until 2023, which is when the financial demands of the EU's seven-year budget cycle are at their highest."

Officials are hoping this will ease the transition to a Britain-less EU and, more specifically, the financial burden on member states as they attempt to make up the €10bn that will wiped off the annual EU budget.

An end to "vast contributions", says May

British prime minister Theresa May has already pledged that Britain's "vast contributions" will end, so a battle can be expected as the EU attempts to get the nation to honour commitments made in the 2014 – 2020 budget round, which essentially amount to a delayed backlog of payments for projects already underway. The EU wants Britain to sign an agreement in principle on this debt before any discussions on a trade deal can be opened.

The Daily Telegraph also heard that the EU meeting found France, Germany and the European Commission deeply divided over how British debt should be calculated.

The Commission wants Britain to be allowed to offset its share of the EU's €154bn assets against what it owes.

The source said:

"Both France and Germany objected to this, but the Commission said it was hard to argue that Britain must pay up for its outstanding commitments while refusing to recognise its share of the EU's assets."

The Commission also hinted that a certain amount of flexibility on how owings were presented could be expected:

"The Commission accepted that there was room for manoeuvre on how the bills are presented, but also admitted that Britain would only sign an agreement on those bills if it was certain that Europe was going to offer it a new partnership."

"A shock to the EU budget"

A Jacques Delors Institut report last month said of the financial quandary facing Europe:

"It is clear that Brexit will deal a shock to the EU budget. There is no way to fill the 'Brexit Gap' of around €10bn per year."

Assessing the impact on each member state, it found, for example, that everyone in Ireland would have to contribute an addition €18 to the EU coffers.

 

Meanwhile, Britain remains on track to trigger Article 50 by the end of March, though a specific date remains elusive.

The country's Brexit minister David Davis told reporters during a trip to Estonia on Monday:

"We will compete by March 31st and trigger by March 31st. When before then? I am not going to offer a view. I am confident we can meet that date."