13

Articles like http://www.bbc.co.uk/news/world-europe-39453338 claim that UK might have to pay to leave the EU a bill estimated to be as much as €60bn (£51bn; $64bn).

What's the justification of the bill? (e.g. a high level breakdown €5bn for this, for that etc.)

Improve this question
1
  • 1
    I have seen an attempt at a breakdown of it, reported in a newspaper. The theory is that more than half results from the fact that the UK government uses a cash-basis of accounting, rather than a commitments basis. Projects which have been agreed with the UK as a party, but not yet undertaken, or paid for, are the principal item. The astonishingly shocking thing, to my mind, was that when asked how much she thought the figure was Mrs May replied that she didn't know! One might be forgiven for thinking that there should be officials at the Treasury who ought to know such things!
    – WS2
    Commented Mar 31, 2017 at 22:49

1 Answer 1

Reset to default
15

This document published by the Centre For European Reform details the major parts that the bill is made up with.

The main parts of the bill are unpaid budget appropriations (basically the EU’s credit card); unused national allocations of investment spending, which Britain approved for the 2014-20 period; and the cost of the pension promises made to EU officials. The obligations are partly onset by flows of money back to Britain from its share of assets, budget receipts and the payment of the UK rebate.

In my answer below, I will detail some of the major parts of the Brexit bill.

Unpaid commitments

This is mainly added from EU spending on projects that are approved and paid over a period of several years.

  1. Reste à liquider ("yet to be paid")

    • €241 billion bill that has ballooned since 2000 as the EU has piled on projects to its schedule of works and investment

    • This makes up the biggest portion of the Brexit bill and the UK's share of the Reste à liquider would be an estimated €29-36 billion, calculated according to its typical contribution rate.

  2. Outstanding spending allocations

    • The Commission’s argument is that the UK jointly approved around €143 billion of investment spending that is legally binding on the EU but will only be paid once Britain has left. In EU law, these are legal commitments that become budget commitments once money is reserved to pay for them in the EU’s annual budget round. The pledges are in addition to the commitments already in the RAL, and the Commission wants Britain to honour its share. It is by far the most contentious part of the exit bill.

Pension promises to EU officials

This costs the UK €63.8 billion and is retirement benefits for EU officials. The UK would have to pay all UK nationals working within the EU institutions which would cost €80 million this year.

However, the EU Commission wants the UK to pay pensions for all EU officials, not just British nationals, since they all worked for the EU when the UK was a member. According to the EU consolidated accounts, it will cost up to a full €63.8 billion.

Other legal obligations

The Commission will seek to secure Britain’s share of funding for those commitments that are seen as legally binding, either because they are in multi-annual allocations, or arise from contracts that have already been signed.

These includes:

  • Connecting Europe Facility (CEF) - EU liability €10.1 billion
  • Copernicus and Galileo programmes - EU liability €3.1 billion
  • Miscellaneous - EU liability €3.4 billion
  • European Fund for Strategic Investments (EFSI) - EU liability €16 billion

More includes:

  • Guarantees and provisions: €23.1 billion
  • Loans: €56.1 billion

Overview of the Brexit bill calculations

(page 10; from the same document linked above)

Image

Improve this answer

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .