The UK would be obliged to pay for EU programmes approved after leaving the block and it would not receive a share of Union assets, senior EU officials confirmed today (5 May).
“Some have created the illusion that Brexit would have no material impact on our lives or that negotiations would be concluded quickly and painlessly,” said the EU’s chief Brexit negotiator Michel Barnier. “This is not the case.”
“There will be human, social, economic, technical, financial and legal consequences” after ending the 44-year membership to the EU, he added.
The European Commission published the negotiating directives on Wednesday that will serve as the basis for the negotiations with the UK government.
The text details the political guidelines adopted by the European Council on 29 April.
The document is expected to be adopted by the Council without major changes on 22 May.
As it was agreed by EU leaders, citizens’ rights and the financial settlement will be part of the first phase of the negotiations.
But the negotiating directives toughened the EU position on these issues, reflecting the change of tone on both sides.
Commission President Jean-Claude Juncker is reported to have said that British Prime Minister Theresa May is “living on another galaxy” given her expectations for the talks after he visited her in London last week.
May responded this week by saying that the Commission chief would find a “bloody difficult woman” when the negotiations start.
“The negotiations will be difficult,” confirmed Barnier.
Pay for all
In regards to the Brexit bill, senior EU officials explained that Britain would have to cover all commitments made for this financial period (2014-2020), even for projects approved after its exit from the EU (March 2019).
In addition, the negotiating directives stipulate that the UK should “fully cover” all costs related to the relocation of the European Medicines Agency and the European Banking Authority.
Officials confirmed that, as a result, the UK government would have to pay any penalty derived from breaking the lease agreement of EMA headquarters. EU authorities agreed to a 25-year lease, without including an exit clause.
The bill keeps growing with additional expenses related to the termination of its membership to the European Investment Bank, the ECB, and its participation in various EU funds and policies, such as the European Development Fund or the Facility for Refugees in Turkey.
But the UK could not discount its share on various EU assets (buildings, other properties,…) because “the EU has a legal personality and therefore it owns the assets”, insisted a senior EU official.
Barnier ruled out giving any “definitive figure” on how big could be the financial settlement, given that “commitments will continue entering into” until the Brexit materialises.
But the result could be a bill higher than the €60 billion initially floated by Juncker. Britain could end up disbursing €100 billion, according to the Financial Times.
The differences over what should be included to estimate the bill would poison the discussion since the beginning.
But Barnier insisted on several occasions that the figure is not a “punishment” or a “Brexit bill”. “It is about settling the accounts.”
List of rights
Citizens’ rights are also expected to complicate the initial phase of the negotiations.
The negotiating directives listed a long list of rights that should be guaranteed for the 3.2 million of EU citizens living in the UK and the 1.2 millions of Brits living in the EU-27.
These are the residence right, including the right of permanent residence after a continuous period of five years of legal residence; access to social benefits and the labour market, and the recognition of diplomas and other formal qualification obtained in any EU member state before Brexit.
The executive also restated its view that the European Court of Justice would be the competent authority to enforce and interpret the Brexit deal, an idea disliked by the British government.
But senior EU officials said that there could be “some space” for other judiciary authorities for other roles.
First deal by autumn
In light of the differences between the two sides on these issues, and the need to reach “solid” solutions, Barnier said that it will take time to seal a deal.
But he was hopeful that an agreement on citizens’ rights and the bill, and the new borders, could be reached by October or November this year.
Once Barnier considers that “sufficient progress” has been achieved, he would recommend the European Council to open the second phase of the negotiations, where the EU will start preparing the future association agreement with the UK, and the transitional period to bridge both situations.
Once the parameters of the new relationship are clear by autumn 2018, according to Barnier, the procedure to ratify the Brexit deal would start. The process should be completed by March 2019.
Only when the UK has become a third country, the club could finalise the details of the new association agreement.
Given the worsening relations between the two sides and the confrontational rhetoric, Barnier said that the EU was “working on all options”, including a plan B in case Brussels and London fail to reach a deal.
But he insisted that he will work for reaching an “orderly withdrawal” as he urged to start negotiating and remove the uncertainty.
Looking ahead, he hoped to build an “entente cordial” with the UK after the Brexit. “That is my objective,” he stated.