EU says reneging on Brexit bill would damage UK economy
Günther Oettinger, European commissioner for the EU’s finances, linked the settling of Britain’s debts as agreed by Theresa May to Brussels’ approach to the prospects of the country retaining any kind of beneficial relationship with the bloc.
Johnson, who remains the clear frontrunner in the race to be the next prime minister, has threatened to hold back on payment of the UK’s financial settlement with the EU, estimated to be around £39bn, claiming the sum could be used as “lubricant” to improve Britain’s bargaining position in trade talks.
The EU’s position is that the British government has already agreed to the settlement and that even in a no-deal scenario, Britain would need to pay both liabilities relating to the existing EU budget, which runs until the end of 2020, and unspent commitments that Britain signed off on as a member state.
In any circumstance, should the UK wish to open talks with the EU over a future relationship, Brussels insists that it would be conditional on full payment.
Asked about the threats emanating from Johnson’s campaign, the European commissioner for the budget, Oettinger, conceded that there was no court Brussels could appeal to if the UK reneged on its debts, but that such a move by a new prime minister would damage Britain’s prospects.
He said: “Mrs May’s government accepted the payment of that amount so we expect that, no matter which government will be our negotiating partner in the future. We expect them to accept that bill.
“We’re willing to go into the detail of how that sum breaks down. If a future government would not be ready or willing to pay then the problem is there’s not really a court to settle the dispute, but we do have some arguments.
“No matter who’s in charge he or she will want to ensure that [the] relationship between the UK and the EU has a future, that in terms of imports and exports, employment law, or programmes such as Galileo [satellite programme] and Erasmus Plus or the Horizon Europe [research programme] – we need to find solutions for all of those programmes.
“I don’t want to anticipate any future vote but we want to ensure that the EU can negotiate Horizon Europe, Erasmus Plus; we want to have agreement with UK universities and for that, for the future of UK research, we need to settle old debts fairly.
The divorce bill is contained within the withdrawal agreement that the EU is unwilling to renegotiate despite its rejection by the House of Commons. The £39bn estimate was based on the UK leaving on 29 March and enjoying a 21-month transition period.
A spokesman for the French government suggested last week that reneging on the divorce bill would be tantamount to default on sovereign debt, in an indication that member states would also put the rating agencies under pressure to downgrade the state of the British economy.