UK ready to pay up to $47bn to leave EU: Report

Reuters
According to a report published in the Sunday Telegraph, British officials are likely to offer to pay €10 billion a year for three years after leaving the EU in March 2019. (Reuters)

LONDON: Britain is prepared to pay up to €40 billion ($47 billion) as part of a deal to leave the EU, the Sunday Telegraph newspaper reported, citing three unnamed sources familiar with Britain’s negotiating strategy.
The EU has floated a figure of €60 billion and wants significant progress on settling Britain’s liabilities before talks start on issues such as future trading arrangements.
The government department responsible for Brexit talks declined to comment on the article. So far, Britain has given no official indication of how much it would be willing to pay.
The newspaper said British officials were likely to offer to pay €10 billion a year for three years after leaving the EU in March 2019, then finalize the total alongside detailed trade talks.
Payments would only be made as part of a deal that included a trade agreement, the newspaper added.
“We know (the EU’s) position is €60 billion, but the actual bottom line is €50 billion. Ours is closer to €30 billion but the actual landing zone is €40 billion, even if the public and politicians are not all there yet,” the newspaper quoted one “senior Whitehall source” as saying.
Whitehall is the London district where most British government departments and ministers are based.
A second Whitehall source said Britain’s bottom line was “€30 billion to €40 billion” and a third source said Prime Minister Theresa May was willing to pay “north of €30 billion,” the Sunday Telegraph reported.
Brexit Minister David Davis said on July 20 that Britain would honor its obligations to the EU but declined to confirm that Brexit would require net payments.
Foreign Secretary Boris Johnson, a leading Brexit advocate, said last month the EU could “go whistle” if it made “extortionate” demands for payment.
Pro-Brexit campaign group Leave Means Leave said speculation about a divorce bill was “unhelpful.”
“With the EU Brexit negotiations, nothing is agreed until everything is agreed,” said the group’s co-chair Richard Tice.
“The focus should be on accelerating talks with the aim of concluding them at the end of 2017. This would enable businesses to adapt during the 15 months leading to March 2019.”
The Telegraph said advisers in May’s office had warned bosses in London’s financial sector that Britain walking out of Brexit talks was a “real possibility” if the impasse over the bill cannot be broken.
Romano Prodi, former head of the European Commission, told the Observer newspaper it would be economic “suicide” for Britain to fail to reach a compromise on Brexit, and called on the EU to preserve as much trade with Britain as possible to avoid damaging both sides.
If Britain cannot conclude an exit deal, trade relations would be governed by World Trade Organization (WTO) rules, which would allow both parties to impose tariffs and customs checks and leave many other issues unsettled.
Last week, the Bank of England (BoE) said Brexit uncertainty was weighing on the economy. Finance Minister Philip Hammond wants to avoid unsettling businesses further.
The EU also wants agreement by October on rights of EU citizens already in Britain, and on border controls between the Irish Republic and the British province of Northern Ireland, before trade and other issues are discussed.