Wednesday, October 18

Fears heighten over the Brexit Bill

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Fears over Brexit heighten this week as Michael Barnier, the chief negotiator on the Brexit deal, fears that if the EU does not lessen their demands for Britain’s “divorce bill” it could potentially lead to an end in negotiations and Brexit will continue without a deal in place.

Estimates as to the size of the divorce bill are now flirting around the €100bn figure as reported by the Financial Times earlier this week, it appears Britain may have to prepare to exit the EU without a deal being confirmed.  However, with this being said, Mr Davis, Britain’s Brexit secretary, has recently reassured confidence in the deal by stating that the €100bn figure should be taken “with a pinch of salt”. He explained that this is a negotiation, both parties need to get what they want out of the deal and that official settlement talks have not yet begun.

Many people anticipated that the Brexit deal was always going to be a complicated and rocky road to go down but the deal can ultimately be summarised into several distinct elements.

The first of which is the commitments that have already been agreed upon by the EU before the initiation of Brexit. These are described in Brussels as the reste à liquider or “still to be settled” arrangements and include agreements that relate to funding for research and building projects.

Secondly, the framework by which the EU sets out its budget is in seven-year periods which does not conclude until 2020.  This is arguably the most complicated element of negotiations, as this legal act is approved by both the council of Ministers (EU) and the European Parliament.

The third element applies to the pensions of employees working for EU businesses. In the EU budget, there is an allotted amount of money reserved for the pension funds of retired employees of European institutions; one that which the UK may have to buy out of to ensure that British citizens are still entitled to same pension deal post-Brexit.

However, in disregard of these factors, many commentators have suggested that Britain’s departure from the bloc should come with no financial implications whatsoever, as the UK has made a sizeable and consistent contribution to the EU for the last 40 years. Furthermore, a recent report published by the House of Lords committee affirmed this belief and said that the UK is not legally obliged to pay anything but if this approach were to be adopted it may hinder any chance of a post-Brexit trade deal.

Britain’s Foreign Secretary and Former Mayor of London, Boris Johnson said that Britain could “definitely” just walk away from negotiations without any financial obligations being paid and accused the EU officials of “trying it on”.

Similarly, UKIP leader Paul Nuttall has also (unsurprisingly) backed this approach stating that the 100bn figure was “ridiculous…the UK should not be paying anything at all”.

 

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About Author

Chris is a second-year law student in Durham, originally from Manchester, with particular interest in international affairs, public policy and monetary systems.

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