Britain faces a “divorce bill” of as much as £18 billion (€20 billion) when the country eventually leaves the European Union thanks to its commitments to huge numbers of shared payments with the other 27 nations in the bloc.
According to an analysis carried out by the Financial Times, Britain needs to pay back, at the upper estimate, around €20 billion in commitments to pensions, infrastructure funding, and other transnational projects that are part of its current membership of the EU.
The FT’s research concludes that the €20 billion figure “covers Britain’s share of continuing multiyear liabilities, including unpaid budget appropriations of €241bn, pensions liabilities of €63.8bn and future contractual and other spending commitments totalling about €32bn.”
Basically, while it has been part of the bloc, Britain has made commitments, along with all other member states, to fund all sorts of different, long term projects. Now it is leaving however, it needs to pay the outstanding cash on those commitments in full as part of its exit.
The figures just add another layer not only to the complexity of any Brexit deal, but also to its cost. Earlier this week it was reported that Britain may have to pay billions of euros annually to the EU, even after it leaves the EU and even if it opts for a “Hard Brexit” — leaving the bloc without access to the Single Market.
A number of officials in government believe the UK will have to make these payments to stay part of the EU Single Market, according to the BBC programme Newsnight.
Britain’s government also predicts that a “Hard Brexit” will cost the UK £66 billion a year in lost tax revenues, another massive cost associated with Brexit.
When Prime Minister Theresa May triggers Article 50, starting the two-year negotiation period for the UK’s exit from the European Union, all eyes will be on negotiations to see what type of deal Britain gets.
It looks like Britain is careening head-first into a “Hard Brexit,” which would see it restrict freedom of movement but lose Single Market access. The Conservative-led government is prioritising immigration in the nation’s Brexit deal.
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