UK Could Be Left With A €25 Billion Bill As It Leaves The EU
Patrick Hertzog / AFP / Getty Images
The UK government could still be paying into the European Union budget even after it has formally left the union, because it has already pledged tens of billions of pounds towards projects and initiatives that will take years to complete.
As part of the EU budget, member states commit to funding large-scale projects over multiple years, with some of the the money only changing hands when a project is complete. For example, if the EU funds a bridge, some payments will only be due once the bridge is actually complete.
A European Commission source told BuzzFeed News that it was as if the UK had ordered a car and put down a deposit – it would be obliged to pay the full balance when the vehicle was finally delivered.
This money will have been known about by the UK government because the spending commitments are integral to the EU budget, but it did not form part of the EU referendum campaigns.
At the end of 2015, such outstanding commitments to the EU budget across all 28 member states totalled €217 billion. According to a report published in the German daily Handelsblatt on Thursday, the UK’s bill amounts to €25 billion. The report suggests that the EU wants Britain to settle the amount before it exits.
The European Commission would not confirm the exact amount; however, a source said that although commitments are not a debt, legal pledges to provide finance must be honoured with payments.
In effect, the UK has already committed to paying its share, and it could be required to pay for already planned major infrastructure projects even after it has quit the EU. Britain and the EU will now have to negotiate these spending commitments as part of Brexit.
The UK government has refused to say whether it will fulfil these spending commitments once the country formally leaves the EU.
A government spokesperson said: “Arrangements for how the UK will exit the EU will be subject to detailed set negotiations, commencing once Article 50 is triggered.
"We are about to begin these negotiations and it would be wrong to set out unilateral positions in advance.”
A commission spokesperson said: "The UK regularly pays its national contributions to the EU budget, like the other member states, and receives payments from the EU budget like any other member state.
"The Commission will not speculate about any implications on any future negotiations when Article 50 has not even been triggered."
Although a multi-year EU budget is agreed by all member states in consensus, the total each member state contributes to the budget is not immediately paid. Alongside the payments each country makes (and what it gets back) in any given year, there is the promise of future payments linked to longer-term initiatives.
Cash payments and pledged commitments comprise the two main elements of a member state's EU budget contributions. In effect, commitments are tomorrow's payments.