The UK has bowed to EU demands on the Brexit divorce bill in a move that could result in the UK paying £50bn to Brussels, in an attempt to get France and Germany to agree to move negotiations to trade.
Non-stop behind-the-scenes negotiations have led to a broad agreement by the UK to a gross financial settlement of £89bn on leaving the bloc, although the British expect the final net bill to be half as much.
A senior EU official told the Guardian that the UK appeared ready to honour its share of the EU’s unpaid bills, loans, pension and other liabilities accrued over 44 years of membership. “We have heard the UK wants to come along with the money,” the official said. “We have understood it covers the liabilities and what we consider the real commitments. But we have to see the fine print.”
The bill could total £53bn to £58bn (€60bn to €65bn), although EU officials are not discussing numbers and the British government will fight hard to bring the total down. While EU sources have spoken in recent months of £53bn to £58bn, both sides are trying to avoid talking numbers to help the British government deal with the potentially toxic political fallout.
Theresa May got the agreement of key cabinet ministers last week to increase the amount that the UK was willing to pay. However, sources made clear that the discussion at the meeting of the Brexit cabinet subcommittee did not include agreeing to a particular figure, but instead to signing up to a method by which the bill could be calculated.
For EU diplomats the moment of truth will come at a lunch meeting between May and the European commission president, Jean-Claude Juncker, on Monday 4 December, when all three Brexit divorce issues will be on the table: the Brexit bill, the Irish border and protecting EU citizens’ rights. If the EU’s chief negotiator, Michel Barnier, thinks the outcome is clear, he could issue his recommendation on sufficient progress the same day.
EU leaders will make the final decision at a European council meeting on 14 and 15 December, but Barnier’s recommendation to move on to the second phase of Brexit talks will be crucial. His decision will trigger an intense round of discussions in 27 EU capitals, involving different government departments and, in some cases, parliaments.
“I think we can reach sufficient progress, but again we haven’t seen anything on paper yet, so I am always extremely cautious,” said the EU official.
The FT has reported the gross liabilities to be more than €100bn, which fall to €55bn to €75bn once the UK’s share of EU assets is taken into account.
The signs of agreement over money have left the Irish border as the most uncertain issue hanging over the talks. EU diplomats are uncertain whether the Irish government could hold up the process by calling on Barnier to refuse sufficient progress. “There are lots of different signals coming about the possibility of an Irish veto,” said one diplomat. “As things stand now, I’d say we have 50/50 chance of that happening.”