Brexit and the waning days of the United Kingdom

[Tamas]

Yeah if you paint the picture of the EU demanding 100 billion RIGHT NOW, getting a deal where you pay 10 per year for 8 years will look like a great victory for Fuhreress May

[celedhring]

The net contribution would be less than 100m too, since the UK would still benefit from several of those programs.

[Gups]

Well the UK pays 13 or 14 £bn each year to the EU. So the big scary number is roughly our contributions for the next few years that we have signed up for. It is easy to see that given the slowness of brexit this might not be a big deal at all.

But for some reason it is being presented in an inflammatory way 

But, if you look at the FT breakdown, we will be making contributions while (largely) not receiving benefits. So, for example:

E27.4bn - contribution to CAP subsidies  post-Brexit while UK farmers' will cease to be entitled (that's . A buig chunk (30bn)
E27.6bn - contribution to cohesion funds which will be allocated post-Brexit
E11.9bn - upfront lump sum payments for loan guarantees etc. This assumes that all liabilities fall in, which is not possible.

Obviously this is just an initial negotiation position and is to be expected, but you guys are acting as if the EU's starting position is totally reasonable and rational when it is clearly a massive try-on. The UK should be liable to pay for expenditure already committed when it falls in, for pensions to EU employees and for liabilities such as loan guarantees when invoked. It should be repaid its share of EU property and funds.

[Josquius]

Would we cease to recieve the benefits?
As I understand it the reason we have to pay is we've signed on for these programmes for x years. If we're still part of these programmes then we should still get the benefits.

[Gups]

Would we cease to recieve the benefits?
As I understand it the reason we have to pay is we've signed on for these programmes for x years. If we're still part of these programmes then we should still get the benefits.

Nope. a chunk of these are programmes which have not even been committed to by the EU. However, contrary to my earlier post UK farmers will still get CAP payments.



   https://www.ft.com/content/cc7eed42-2f49-11e7-9555-23ef563ecf9a


   The EU has raised its opening demand for Britain's Brexit bill to an upfront gross payment of up to €100bn, according to Financial Times analysis of new stricter demands driven by France and Germany .Following direct requests from several member states, EU negotiators have revised their initial calculations to maximise the liabilities Britain is asked to cover, including post-Brexit farm payments and EU administration fees in 2019 and 2020. Although over coming decades Britain's net bill would be lower than the €100bn upfront settlement, the more stringent approach to Britain's outstanding obligations significantly increases the estimated €60bn charge mentioned by Jean-Claude Juncker, the European Commission president. It also reflects the steadily hardening position of many EU member states, which have abandoned early reservations about the bill's political risks to pile on demands that will help to plug a Brexit-related hole in the bloc's common budget. Paris and Warsaw have pushed for the inclusion of post-Brexit annual farm payments, while Berlin is against granting Britain a share of EU assets .Brussels's €100bn Brexit bill. Estimates of Britain's Brexit bill are highly variable because they include assumptions on Britain's exit date, its proper share of contributions, UK receipts such as its budget rebate or EU investment spending, and the type of liabilities it is expected to honour. European diplomats consider this flexibility as helpful in reaching a deal. The hefty bill represents one of the biggest early obstacles to a smooth Brexit. To the alarm of the EU side, Theresa May bluntly rejected the notion of an exit bill at a recent dinner with Mr Juncker, saying any financial terms would be tied to securing a trade deal by 2019. On Tuesday, she promised to be a "bloody difficult woman" in talks. Michel Barnier, the EU's chief negotiator, has said no figure will be set until the end of the Brexit process and payments could be staggered. But he wants Britain to agree a methodology before trade talks can begin, including a definition of EU liabilities the UK would be expected to share. He will unveil a draft negotiating mandate — including the Brexit bill assumptions — on Wednesday.          

As well as adding €10bn-€15bn of mainly farm-related payments, the commission's tougher approach denies London a share of assets such as buildings. Significantly, it requires upfront payment for contingent guarantees and loans to countries such as Ukraine and Portugal, with Britain being reimbursed as the loans are repaid. According to FT calculations, this brings the upfront gross settlement demand to approximately €91bn-€113bn, depending on how Britain's share is calculated. Over a period of a decade or more, this would be reduced in net terms to roughly €55bn-€75bn as Britain received its share of EU spending and repaid EU loans. Using similar assumptions, the Bruegel think-tank estimates that Britain would make an upfront payment of €82bn-€109bn, which would net out to €42bn-€65bn over the long term. Compared with the FT and some commission officials, Bruegel uses a higher estimate of expected EU spending in the UK and a lower estimate of net pension liabilities. Zvolt Darvas, a senior fellow at Bruegel, said the EU's latest approach clearly represented "the most extensive possible liabilities for the net bill". "It requires the UK to make a large upfront payment that is even bigger than the long- term net bill," he added. The commission has never published its preferred methodology. But in early discussions with member states it took a more conservative view of UK liabilities. The FT previously calculated the figure to be €40bn-€60bn in net terms — a number that corresponds to Mr Barnier's informal estimates shared with member states.
            
                  
This gave Britain a share of EU assets such as buildings, and included only what it sees as legally binding commitments to investment programmes — such as infrastructure projects in eastern Europe — running over multiple years. However, during recent private deliberations, France and Poland insisted that EU liabilities worth €183bn, covering annual farm subsidies and administrative costs, should also be added to the tally. Diplomats say this is reflected in the EU's negotiating guidelines, which refer to "a single financial settlement including issues resulting from the MFF [the EU's long-term budget]". Greece asked that the UK also honour political commitments it made to fund refugee programmes in Turkey. At the request of France, Germany and several other member states, the commission also abandoned its initial plans to offer the UK a share of assets, worth between €3bn and €9bn, depending on the definition used. On the issue of contingent liabilities, Mr Barnier's negotiating mandate is expected to require upfront payment to cover loans or guarantees, which will be "returned in accordance with the maturity of the underlying loans". The European Investment Bank is excluded from the FT calculations. However, the EU is insisting Britain would have a claim only on its paid-in capital, rather than a share of the bank's €63.5bn in own funds that Britain will demand.

[Richard Hakluyt]

Thanks for posting the detail Gups.

I don't think that the EU will be thrilled with the UK's response.

[Gups]

Thanks for posting the detail Gups.

I don't think that the EU will be thrilled with the UK's response.

So far, both sides have acted very aggressively but the latest from the EU is really pretty bad. To change positions so radically and immediately after an election is called is asking for escalation. Theresa May had no real option politically but to respond as she did. I expect positions to moderate as the process goes on but if not, we will leave the EU with no trade deal and the EU will get no contributions from the UK post-Brexit at all.  The EU's current insistence on no negotiations re. trade until the contributions have been settled is unsustainable and the UK would be insane to agree to it. If that continues to be the position, there's not really any point in proceeding with discussions at all.

I'm hoping that Macron if elected will take a less antagonistic approach than Hollande.

[garbon]

Thanks for posting the detail Gups.

I don't think that the EU will be thrilled with the UK's response.

So far, both sides have acted very aggressively but the latest from the EU is really pretty bad. To change positions so radically and immediately after an election is called is asking for escalation. Theresa May had no real option politically but to respond as she did. I expect positions to moderate as the process goes on but if not, we will leave the EU with no trade deal and the EU will get no contributions from the UK post-Brexit at all.  The EU's current insistence on no negotiations re. trade until the contributions have been settled is unsustainable and the UK would be insane to agree to it. If that continues to be the position, there's not really any point in proceeding with discussions at all.

I'm hoping that Macron if elected will take a less antagonistic approach than Hollande.

Yes, sadly that's where things to appear to currently be.

[Tamas]

Thanks for posting the detail Gups.

I don't think that the EU will be thrilled with the UK's response.

So far, both sides have acted very aggressively but the latest from the EU is really pretty bad. To change positions so radically and immediately after an election is called is asking for escalation. Theresa May had no real option politically but to respond as she did. I expect positions to moderate as the process goes on but if not, we will leave the EU with no trade deal and the EU will get no contributions from the UK post-Brexit at all.  The EU's current insistence on no negotiations re. trade until the contributions have been settled is unsustainable and the UK would be insane to agree to it. If that continues to be the position, there's not really any point in proceeding with discussions at all.

I'm hoping that Macron if elected will take a less antagonistic approach than Hollande.

Yes, sadly that's where things to appear to currently be.

It is horrid but it is exactly what was predictable to happen.


Why should not they declare no trade deals 'till bill is settled? Their alternative is to go back to their own voters and tell them, it is their countries who will foot the bill for a huge sum of money the EU and UK agreed to spend but the UK later changed its mind.


It is just so frustrating sometimes how the UK public has been made to think the nation is like this community of excellent dealmakers bound to re-conquer the world by negotiation, but then most people seem to be incapable of understanding that the opposing party in the negotiations (in this case, 27 EU countries) have their own interests, almost all of which are at the very least different from the UK's, and in some cases in straight opposition of those.

Seriously, what were people thinking? The UK has no bargaining power and is totally exposed to the EU side. This cannot possibly end well. Nothing in the world with that kind of setup ends up well to the side with no bargaining chips and put under the gun - even if that side slided under the gun willingly and with patriotic pride. Why this one would be different?

This was perfectly obvious for everyone but the Leave voters from the getgo.

We are all fucked.

[Admiral Yi]

Honestly the exit bill seems like a bit of a swindle to me.  The money hasn't already been spent.  Change the spending plans.

[Tamas]

Honestly the exit bill seems like a bit of a swindle to me.  The money hasn't already been spent.  Change the spending plans.

That means certain areas/sectors receiving less than promised. If they include French farmers in that, Europe will burn. 

[Jacob]

Honestly the exit bill seems like a bit of a swindle to me.  The money hasn't already been spent.  Change the spending plans.

If you move out of your house, you are still on the hook for the mortgage you signed on to until you make formal arrangements to the contrary.

[garbon]

Honestly the exit bill seems like a bit of a swindle to me.  The money hasn't already been spent.  Change the spending plans.

If you move out of your house, you are still on the hook for the mortgage you signed on to until you make formal arrangements to the contrary.

That sort of conceptualize though is why people voted leave.

[Admiral Yi]

If you move out of your house, you are still on the hook for the mortgage you signed on to until you make formal arrangements to the contrary.

There is no EU group house. There is not EU mortgage.  There are the dinner parties the EU had planned on hosting in 7 years that they want the UK to help pay for.

[Zanza]

If you move out of your house, you are still on the hook for the mortgage you signed on to until you make formal arrangements to the contrary.

There is no EU group house. There is not EU mortgage.  There are the dinner parties the EU had planned on hosting in 7 years that they want the UK to help pay for.

"It's not a golf club."