Brussels orders Britain to pay £39bn Brexit bill even if there is no deal

EU Commission President Jean Claude Juncker addresses members of European Parliament on Brexit during a plenary session at the European Parliament in Brussels on Wednesday Jan. 30, 2019
Jean-Claude Juncker warned today that the chances of a no deal Brexit are higher than ever Credit:  Geert Vanden Wijngaert/ AP

Britain must pay the £39 billion Brexit bill even if it leaves the EU without a deal, the European Commission has warned.

Britain agreed to pay the financial settlement to the EU, which include EU Budget payments up to 2020, to cover its liabilities to the bloc and unlock talks over the future relationship.

As it released a new set of no deal Brexit plans in Brussels on Wednesday, the commission said, "all commitments taken by the 28 Member States should be honoured by the 28 Member States."

"This is also true in a “no-deal” scenario, where the UK would be expected to continue to honour all commitments made during EU membership.”

In the European Parliament in Brussels, Jean-Claude Juncker, the president of the commission, warned that a no deal Brexit was more likely after MPs voted to send Theresa May back to Brussels to renegotiate the Irish border backstop. 

“The financial obligations would need to be dealt with,” a senior EU official said, “We want to avoid very disruptive and sudden consequences which would be difficult to handle.”

Committed EU funding to Britain, worth about £4 billion a year, would continue until the end of 2019 but only if the UK paid its EU budget contribution of about £9 billion, more than twice as much.

The official said it was too early to speculate about the EU taking Britain to court if it refused to pay. "If you want to stay friends you don't go to court," said another official. 

After no deal, any British attempt to strike up a replacement trading relationship is likely to be met by a demand for what Brussels terms "a settling of accounts".

One EU source said, “If there is no deal, the financial settlement will be the least of our problems and as for ‘Global Britain’ see what your reputation looks like if you don’t pay your bills”.

A Whitehall official told The Telegraph that the real reason for the demand was the blackhole that would be left in the EU budget until 2020, which would have to made up with increased payments from the EU-27.

A senior UK government source said, “Not paying a penny is not realistic. A substantial amount of that money is the pensions of British EU civil servants which straight away would be OK to pay.”

Officials would have to scrutinise UK assets in Galileo, institutional funding and EU programmes that Britain had contributed to. But the source ruled out paying EU budget contributions beyond leaving the bloc.

“We are not paying membership dues after giving up membership”, the source said, “I’ll cut to the chase, I think the bill would be about half the £39 billion."

 

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