Brexit: the exit bill

Author (Corporate)
Series Title
Series Details No.8039 (05.11.18)
Publication Date 05/11/2018
Content Type

When the United Kingdom left the EU it was expected to make a contribution towards the EU’s outstanding financial commitments. The media labelled this as an ‘exit bill’ or ‘divorce bill’, the EU saw it as a matter of ‘settling the accounts’. The issue would be discussed in the first phase of Brexit negotiations, under the title of the ‘single financial settlement’ (the settlement).

On the 6 August 2017 The Sunday Telegraph reported that Whitehall sources had suggested that the UK was prepared to offer a €40bn financial settlement. However, The Guardian and other news sources on the 7 August 2017 dismissed this report as inaccurate speculation and quoted government sources as saying that such a high bill would be unacceptable to the government and public.

The EU had suggested a figure closer to €60bn would be acceptable.

During the autumn of 2017 varying other figures were cited by various news sources but usually involving the UK accepting the principle of its financial liabilities. In late November 2017, The Daily Telegraph reported that the final payment figure would be 'between €45bn (£40bn) and €55bn (£49bn), depending on how each side calculated the output from an agreed methodology'.

The article said that these terms were agreed at a meeting between both sides in Brussels, although it was not yet an official agreement.

Brexit Negotiations

+ 29 March 2017: The UK triggered Article 50, the process for the start of the negotiations for the United Kingdom to leave the European Union.
+ 19 June 2017: 1st Round
+ 17-20 July 2017: 2nd Round
+ 28-31 August 2017: 3rd Round
+ 25-28 September 2017: 4th Round
+ 9-12 October 2017: 5th Round
+ 19-20 October 2017: European Council
+ 9-10 November 2017: 6th Round

As a follow on to the European Council held in Brussels on the 19 October 2017, the heads of state and government of the Member States of the European Union met in EU27 formation (EU Member States minus the United Kingdom) on the 20 October 2017. They adopted conclusions on the state of the Brexit negotiations.

To the disappointment of the United Kingdom government, the EU27 deemed that insufficient progress had been made on the EU's three priority aims (citizens’ rights, financial settlement and Northern Ireland) to allow for the second sequence of negotiations, including trade issues, to begin .

The issue would be examined again in December 2017 at the next European Council summit. However, internal preparatory discussions as to second sequence issues would begin between the EU27 and the EU Institutions.

It was announced on the 31 October 2017 in a jointly agreed statement by Michel Barnier, the European Commission's Chief Negotiator and David Davis, Secretary of State for Exiting the European Union that a further shortened sequence of Article 50 negotiations would be held on the 9 and 10 November 2017.

The short sixth round of negotiations between the United Kingdom and the European Commission took place between the 9 and 10 November 2017. They were led by David Davis, head of the Department for Exiting the European Union, and Michel Barnier, Chief Negotiator for the European Commission's Taskforce on Article 50 negotiations with the United Kingdom.

There were three negotiating groups covering:

+ citizens’ rights
+ financial settlement
+ other separation issues (such such as Euratom, EU external agreements and dispute resolution).

The issues related to Northern Ireland and the governance of the withdrawal agreement were addressed by the Coordinators.

Little clear progress was reported by either side at the end of the negotiations. David Davis said 'this week has enabled us to consolidate the progress of earlier negotiating rounds and to draw out those areas where further political and technical discussion is required ... This is now about moving into the political discussions that will enable both of us to move forward together'.

Michel Barnier said 'Do not expect from us today, at this stage, announcements or decisions. ... The discussions over the past days – in between the two European Councils – are a moment of deepening, clarification and technical work.

He also indicated that the UK had two weeks left to make concessions if the Brexit negotiations were to advance to the next stage at the December 2017 European Council meeting. The concessions were seen to concern, in particular, the issues of the border between Northern Ireland and Ireland, and the financial settlement.

Source Link
Related Links
ESO: Background information: How much will Brexit cost? (Blog: UK in a Changing Europe, May 2017)
ESO: Background information: Brexit and the EU Budget
ESO: Background information: The €60 billion Brexit bill: how to disentangle Britain from the EU budget
ESO: In Focus: Brexit - The United Kingdom and the European Union
Bruegel: Working Paper, No.3, 2017: Divorce settlement or leaving the club? A breakdown of the Brexit bill
ESO: Background information: The UK's contribution to the EU Budget
Politico, 17.07.17: Michel Barnier prepared to ‘stall’ Brexit talks over UK bill
Deutsche Welle, 06.08.17: Report: UK to cap Brexit fee at 40 billion euros
Institute for Government: Brexit Explained: The EU divorce bill
The Telegraph, 06.08.17: UK ready to pay £36bn Brexit bill, but only if EU talks trade
EUObserver, 07.08.17: UK will have to pay beyond Brexit, EU warns
The Guardian, 07.08.17: Downing Street denies UK willing to pay €40bn Brexit divorce bill
EurActiv, 07.08.17: London sees €40 billion as a fair Brexit bill
EurActiv, 28.06.17: UK has ‘lots of legal advice’ to reject €60 billion Brexit bill
Politico, 07.08.17: Günther Oettinger: UK must pay EU until 2020 despite Brexit
Politico, 07.08.17: Brexit bill: No longer if, but when and how much
Politico, 22-23.08.17: Brussels to UK: Give us clarity on divorce bill or Brexit talks will stall
Full Fact: Economy: Brexit: The EU 'divorce bill' (November 2017 and updated)
BBC News, 31.08.17: 'Divorce bill' row frustrates Brexit talks
Politico, 15.08.17: Britain will not commit to Brexit bill figure by October, says David Davis
Blog: Open Europe, 20.07.17: The view from Brussels: How negotiations between the UK and the EU on Brexit financial settlement are slowly making progress
InFacts: Analysis, 07.08.17: Brexiters play perilous game with EU ‘divorce’ bill
EurActiv, 19.07.17: UK challenges obligations to every EU programme
Euro|Topics: Debates, August-September 2017: Brexit: Brussels and London battle over money / Brussels and London grapple over EU budget
Blog: LSE EuroppBlog, 09.08.17: If Britain doesn’t pay the Brexit divorce bill, her ex-partners will have to
Politico, 26.08.17: UK must pay Brexit bill, says Angela Merkel
Politico, 18-19.07.17: UK to reject EU demand for Brexit bill estimate
European Commission: Position Paper, May 2017: Position paper transmitted to the EU27: Essential principles on the financial settlement
UK: Parliament: Committees: European Scrutiny Committee: News, 26.10.18: Treasury should provide assurances on transition extension costs

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