LONDON — The European Union wants to add another cost onto Britain’s so-called Brexit divorce bill by making the UK pay some of the costs of moving EU agencies from London.
Two key EU authorities, the European Medicines Agency (EMA) and the European Banking Authority (EBA), are both currently based in London, but the EU is demanding that the pair move out of London after Brexit, as it believes they should remain in European Union countries.
The UK government is currently contesting a belief that both agencies should stay in Britain.
The EMA is a particularly thorny issue, as it has recently signed a long-term rental contract on offices in Canary Wharf, with no clause to allow an early break in the contract, meaning that when it leaves London, the full contract must be fulfilled. The EMA noted in its report that “the rental agreement was signed in 2011 when a potential exit of the UK from the Union was not foreseeable.”
Writing in a draft negotiating directive, the European Commission says: “The United Kingdom should fully cover the specific costs related to the withdrawal process, such as the relocation of the agencies or other Union bodies.”
Brussels wants Britain to foot the bill, which currently stands at close to €347.6 million but could reach as high as €400 million once business rates and service charges are taken into consideration.
If Britain were to pay the bill in this instance, it would be another cost in the already incredibly expensive divorce proceedings.
As it stands, Britain is expected to be hit with a bill of roughly £51 billion, which will effectively be a means of settling all its outstanding liabilities with the European Union.
The British government has said that it will pay a settlement to the 27-nation bloc, but believes the amount demanded by the EU is too high. In March, leaked documents obtained by Dutch magazine De Volkskrant suggested that the EU would consider taking the UK to court if the two sides don’t agree on the bill.
The EU’s chief Brexit negotiator Michel Barnier will tell British government to hand over the cash once talks formally begin, but is said to be expecting talks about the bill to take up as much as a quarter of the Article 50 period.
“He thinks we will be discussing money and acquired rights [of expatriate citizens] until December,” a “senior eurozone official” who is in contact with Barnier told the Financial Times in late February.
“No trade, nothing about the future, just the past.”