Brexit: London opens a new front with Brussels on divorce bill

Les suites du divorce continuent de polluer les relations entre l'Europe et le Royaume-Uni.

On July 9, 2021, 6:20 pm

In divorce, cash matters are always very difficult to resolve. After fishing, Irish border , The fate of the city or vaccine production, Europe and the United Kingdom have found themselves an additional matter of controversy: the “Brexit bill”, which the United Kingdom ‘must come to settle accounts out of Europe. Union.

The EU’s 2020 budget report, finalized at the end of June, states that London will have to pay $ 47.5 billion to Brussels under a series of articles agreed upon by both parties as part of the Brussels withdrawal agreement. . The first tranche of 6.8 billion is due this year, according to the EU’s consolidated budget report. The rest spread over many years.

Past financial obligations

According to Brussels, this .5 47.5 billion is equivalent to the amount of financial obligations London made within the framework of the 2014-2020 European budget and its contribution to the pensions and sickness plans of British European government employees. The year 2020, which is similar to the transition period, is well included: the United Kingdom was then legally a member of the European Union, with rights (benefits of European funds) and associated obligations, but without participation. Results.

According to London calculations, the bill will be cheaper. The UK Treasury estimates the net exchange rate at $ 35-39 billion or $ 40.9-45.5 billion at current rates. The European Budget estimate (47.5 billion) is the “EU estimate for internal accounting purposes”, estimating the British Treasury. “For example, this does not include the amount that the EU owes to the United Kingdom, which reduces the amount we owe,” a spokesman said. Nevertheless, Brussels confirms that this is a “net” debt, but not a total debt.

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Number of London

More clearly, a spokesman for Prime Minister Boris Johnson said “we do not recognize this figure.” In a statement from March 2018, the British Office of Budget Responsibility expected a “Brexit bill” of 41 41.4 billion for its part. London is expected to make a new assessment of the treasury document in the coming weeks.

The calculation methods are complex. The overall assessment of the invoice may vary depending on the accounting choices, for example the transfer rate or the assessment of the pension of government employees. Tony Murphy, a member of the European Court of Auditors, said the $ 47.5 billion figure for Irish television RTI was “final” and that it had been audited.

“A legal duty”

When discussing This financial control of Brexit , Europeans were not involved in a final count. The agreement did not actually provide for it, reminiscent of one in Brussels, but it clearly described the methods of calculating net debt. It is not possible to expect this claim because it is linked to the final consolidation of European budget accounts. The European Commission said on Wednesday that “these calculations are in line with the withdrawal agreement” and “the report is final”, thus closing the door for a downward review of the amount.

First milking

The European executive recalled that settling the debt in full was “a legitimate obligation”, adding that he “has no indication at this stage of competing for the calculated amount” and refuses to “guess” at the potential conflict at this point. Question. The source points out that Brussels London has so far agreed to settle and the first bid was sent in the spring without competition, covering a portion of the 6. 6.8 billion to come in 2021.

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Cory Weinberg

About the Author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

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