FT breakdown: the €100bn Brexit bill
New demands include UK funding EU operations in 2019 and 2020
The law justifying Britain’s Brexit bill is hotly contested, the variables in the calculation are legion and the negotiation has yet to start.
But there can be no doubt that the EU’s €100bn demand to settle Britain’s exit dues is one of the biggest political dangers in the Brexit process.
The Financial Times estimated the bill using the EU’s negotiating guidelines, the more detailed draft mandate for the bloc’s negotiator, Michel Barnier, and conversations with diplomats and officials involved in Brexit talks.
At the behest of member states, the opening position is more stringent than the methodology underpinning the €60bn bill referred to by Jean-Claude Juncker, European Commission president. The tougher stance amounts to a gross settlement of €91bn-€113bn, which over many years would net at about €55bn-€75bn.
Barnier’s initial approach
Mr Barnier’s core argument is that Britain made legally binding financial commitments that it must honour on exit. He wants the bill covered in a single “global settlement”, which the UK can then discuss paying in instalments.
The commission initially looked at three main types of liability, which primarily come due between 2019 and 2025.
The biggest were:
● EU budget items (such as road or rail projects) that had yet to be paid (a category, formally known as reste à liquider, which amounts to about €241bn).
● Other legal commitments to projects that would be initiated after Brexit takes place in 2019, such as investment projects in less developed regions, in rural areas and for fisheries (a total of up to €172bn).
● Long-term obligations and liabilities such as pension promises and contingent loan guarantees.
Mr Barnier then planned to offset this by reimbursing the UK with a share of EU assets (buildings such as the Berlaymont, the commission headquarters), its normal budget rebate and EU spending that would have taken place in the UK.
Contingent liabilities — financial hits that may occur in the future — would be paid if and when any losses were suffered. Britain’s share would be based on its historic contribution, arguably between 12 and 15 per cent, depending on how the rebate is handled.https://www.ft.com/content/29fc1abc-2fe ... ef563ecf9a