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Brexit Invoice Keys: Budgets, pensions and loans

London accepts almost all European demands but gets the estimate to remain in the 45 billion that promised

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Brexit Invoice Keys: Budgets, pensions and loans

The Brexit bill contains almost everything that EU claimed from United Kingdom for payments that will remain pending at time of leaving European family. Initially, EU estimated a balance of 60 billion euros. The figure agreed on Friday, however, traced fork that Prime Minister Theresa May suggested she would agree to pay: between 40,000 and 45 billion euros. To reconcile se two positions, Brexit's negotiators have applied good doses of creativity that allow UK to defer some disbursements and avoid ever having an official account adjustment associated with British divorce. With this lace, May moves its audience that it will not spend one more euro than promised, although agreement guarantees to EU that any unexpected lag in accounts would be conveniently settled.

Learn More
  • United Kingdom agrees to pay up to 45 billion euros for leaving EU
  • Brussels and London agree on conditions of divorce of Brexit

In practice, disbursement of a total of 45 billion euros is a mere orientation. The European Commission has always argued that it was impossible to agree on a number because quantities can evolve over time. But May's spokesman gave for good in London top of 45,000. And Brussels preferred to assume it — unofficially — so as not to incur contradictions that could weaken delicate agreement reached this Friday.

The European negotiator, Michel Barnier, offered a good lead to whom he favors — EU or United Kingdom — agreed financial formula. Asked if he could cite a chapter in which Brussels had ceded, Barnier responded. "Yes, re are aspects in which I have approached British side." I have not insisted, for example, on including costs of moving two European agencies, ' said EU negotiator, referring to change of venue that will be experienced by European Medicines Agency and European Banking Authority, now located In London. This is a negligible detail within a millionaire bill. And British government has also pledged to cooperate in that move.

Account Adjustment

The outlined account setting includes three items. Firstly, contributions that United Kingdom will continue to make to Community budget up to 2020, date on which EU's current financial framework expires. They are between 17,000 and 18 billion euros. Below is bulky part, a kind of bag with commitments acquired in previous budgets and still pending payment. The fee for London is between 21,000 and 23 billion, although London will only pay as y materialize, making payment more bearable. Finally re is chapter on liabilities, mainly contribution to pensions of British officials who will retire in future. They are between 9,000 and 10 billion, although if active-backed part is subtracted, claimable amount remains in 2,000 or 4 billion.

Far from being definitive, limit of 45 billion resulting from se items assumes, for European negotiators, a reasonable estimate that does not include maximalist scenarios. These may derive from United Kingdom's obligation to assume so-called contingent liabilities, of uncertain future. Examples include millionaire loans granted to Ukraine in 2014 to avoid bankruptcy. If Kiev did not reinstate appropriations received, Community budget would have to cope. And since commitment to finance Ukraine was acquired before British departure, London would assume its share. The financial pact can refore be a box of surprises that drag British payments to a very distant time horizon. But by n — predictably — focus of attention on who pays Brexit will be gone. Or at least that's what London expects.

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