Finance

The EU is going to sue Britain if it doesn’t pay its £50 billion Brexit divorce bill

File photo dated 12/03/17 of Brexit Secretary David Davis, who is facing questions in Parliament ahead of the Government formally giving the EU its notice to quit the bloc next week.Britain’s Brexit Secretary David Davis.Yui Mok/PA Wire/PA Images

LONDON — The European Union is preparing for Brexit negotiations in the spirit of “cooperation in good faith,” according to leaked documents seen by a Dutch magazine, but is prepared to take Britain to court if it does not agree on key issues such as the £50 billion ($62.4 billion) Brexit divorce bill.

Dutch magazine De Volkskrant says it has obtained the EU’s draft Brexit negotiating mandate, which was delivered by EU President Donald Tusk this week after UK Prime Minister Theresa May set a date to begin Brexit.

De Volkskrant says that the EU are starting from a position of “cooperation in good faith,” a phrase that concludes the document. However, the publication says this is “apparently not considered to be a matter of course” as negotiators are worried about the “streetfighter reputation” of Britain’s Brexit minister David Davis.

As a result, EU negotiators are preparing to fight if they need to and have drawn up plans to take Britain to the International Court in The Hague. This court is not an EU institution and was set up by the United Nations, so is seen as a neutral venue that Britain should recognise the authority of.

A key issue of contention is likely to be Britain’s Brexit divorce bill. The EU is demanding that Britain pay €60 billion (£51.9 billion) up front to cover things like promised budget contributions and pensions.

However, pro-Brexit MPs in Britain are pushing for a payment of just £3 billion (€3.4 billion), arguing that Britain deserves a share of EU assets and can cancel out part of the EU’s demanded payment. Earlier this month, the House of Lords EU Financial Affairs committee said Britain would not be legally obliged to pay the EU’s demanded divorce bill if no deal was worked out by the end of the two-year negotiating window.

De Volkskrant writes:

“The bill is politically and technically a minefield. How to calculate the pension cost about 55,000 civil servants in the EU? How would you rate the value of EU assets (buildings, cars, wine stocks in EU-restaurants) that Britain has contributed? What are the EU’s budgetary commitments which Britain has committed itself?”

Last month Britain’s former ambassador to the EU Sir Ivan Rogers warned that negotiations over the divorce bill are likely to “bitter and twisted.”

The 10-page document obtained by De Volkskrant also shows that the EU:

  • will only give access to the Single Market is the UK accepts the four freedoms: of movement, capital, goods, and services;
  • wants the 3 million Europeans living in Britain to have the right to remain there and protection of rights. The EU will reciprocate for the 1 million Brits living in the EU if the UK agrees;
  • wants Britain to lose some of its current trading benefits as a result of leaving the EU.

You can read the full De Volkskrant article (in Dutch) here.

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