Britain’s contentious EU divorce bill could be as low as €25bn according to an estimate from an influential European think-tank, far lower than the €60bn that has been suggested ahead of the UK’s unprecedented two-year exit talks.
In a comprehensive breakdown of the UK’s EU assets and liabilities, analysts at Bruegel – a think-tank with close links to Brussels’ institutions – said the cost of the UK’s divorce could range from €25.4bn to €65.1bn.
Questions over the size of the payment are likely to be the first major battleground for negotiators, led by David Davis in the UK and Michel Barnier from the European Commission.
Brussels has insisted on sequencing negotiations, settling the the bill before moving onto issues such as citizen rights and any future trade deal, despite Theresa May’s claims that she wants to negotiate all aspects of an agreement in parallel.
Bruegel’s estimates show Britain could face an upfront payment of €109bn for exiting before its rebate and a series of reimbursements are taken into account. The final figure would be dependent on political compromise, said the report.
Here are some of the reports takeaway numbers:
- EU’s total liabilities and commitments of €724bn; UK’s exposure is €86.9bn (based on 12 per cent share)
- EU’s total assets and contingent claims of €192.6bn; UK has €17.7bn share
- EU’s has spending commitments in Britain of €28.9bn
Despite the wide range of the bill’s estimates, most of Bruegel’s scenario calculations put the total lower than the €60bn touted by EU officials.
Any bill is likely to reflect the UK’s contribution to pensions for EU officials, budgetary commitments stretching out to 2019 and loan guarantees.