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26 Feb, 2017 03:44

Germany, France & Italy call for UK to pay multibillion-euro Brexit ‘divorce bill’

A number of EU states, including Germany, Italy, France and the Czech Republic have expressed their approval for the European Commission’s plan to demand that the UK pays a hefty compensation bill before the Brexit talks will even start.

French Prime Minister Bernard Cazeneuve, Italian Minister for EU affairs Sandro Gozi and a number of senior German diplomats have backed the European Commission’s calls for the UK to come to an arrangement on the “divorce settlement” before any negotiations on the future of British relations with the EU could take place.

According to the Financial Times, Gozi called the possibility of parallel talks on the terms of the UK exit from the bloc and its future trading relationship with the EU "a bad idea."

The view was later echoed by the Czech lawmakers, who also issued a statement backing the Commission’s demands.

“Although an agreement on a future relationship between the United Kingdom and the EU is, from a long-term perspective, a key part of the process, it should be preceded by an agreement on the basic outline of the conditions for the UK’s withdrawal from the European Union, which will serve as the framework for negotiations on future relations,” the statement says, as cited by the Guardian.

On February 23, Austrian Chancellor Christian Kern told Bloomberg that Brexit “is for sure going to be costly [for the UK] because there are a lot of financial obligations.”

The check should be around €60 billion, that’s what the European Commission has calculated and this will be part of the negotiations,” the official said.

Earlier this week, European Commission President Jean-Claude Juncker announced that the Commission would seek a compensation payment from May’s government to cover the costs of commitments the UK has already undertaken but would not fulfill due to its exit from the bloc.

Discussions are under way in Brussels to determine the size of the bill to be presented to May when she launches withdrawal talks, expected in March. According to media reports, the “divorce bill” is likely to total 60 billion ($75 billion), to be paid in instalments until 2023.

“The maximum level of UK gross liabilities could be estimated to amount to around €80bn,” the Guardian reports, citing unnamed EU officials.

The “bill” is expected to include the UK’s share of the cost of projects and programs it previously agreed to as well as the cost of pensions for staff in the institutions and the relocation costs of the EU institutions currently based in London, including the European Medicines Agency (EMEA) and the European Banking Authority.

The Times reported Tuesday that Germany could take the side of the UK and stop the Commission from presenting the multibillion divorce bill immediately after May begins the Brexit process, and even support the idea of parallel talks. The Telegraph said at that time that there was a deep split between France, Germany and the European Commission over how to calculate what Britain owes.

However, even though the situation has changed, Brussels is still concerned with the potential outrage that the demand for compensation could provoke in London.

The scenario of setting a heavy Brexit ‘divorce’ bill could prove to be risky as it might cause backlash by the UK during negotiations,” European Parliament officials told the committee on economic and monetary affairs, as cited by the Guardian.

Earlier, the UK trade secretary, Liam Fox, denounced this idea as “absurd.”