Article

2019-08-28 Britain

UK must pay Brexit divorce bill even if there’s no deal: EU

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Posted by Fred 2019-08-28 00:00|| || Front Page|| [5 views ] Top

#1 Good luck with that.

Britain should ask for it's share of the EUSSR items it's put money towards.

Posted by Bright Pebbles 2019-08-28 02:50|| 2019-08-28 02:50|| Front Page Top

#2 The EU is just spitting mad that the UK is leaving and is not reacting rationally. They are having an emotional breakdown, and these from the people who insisted that they were the sober adults who could be trusted.

Posted by Herb McCoy 2019-08-28 04:16|| 2019-08-28 04:16|| Front Page Top

#3 You and whose army?

Posted by Procopius2k 2019-08-28 07:25|| 2019-08-28 07:25|| Front Page Top

#4 and what ya gonna do when they dont pay?
kick em out?0

Posted by USN, Ret. 2019-08-28 11:21|| 2019-08-28 11:21|| Front Page Top

#5 Britain should ask for it's share of the EUSSR items it's put money towards.

Careful. You might get Greece.

Posted by swksvolFF 2019-08-28 13:15|| 2019-08-28 13:15|| Front Page Top

#6 The sum agreed upon reflects the financial commitments the UK has pledged as a full member of the EU.

Failure to honor them will be interpreted as a sovereign default. Good luck with that.

Posted by European Conservative 2019-08-28 15:04|| 2019-08-28 15:04|| Front Page Top

#7 EC,

Your reasoning isn't up to its usual standard. Who exactly will refuse to lend to the UK on normal terms if the U.K., for the first time in modern history, commits a sovereign default?

Not the US or US banks.
The gulf Arabs? No way.
Who else matters in the financial markets? No one.

Here's a far better analysis than the obviously fraudulent huffing & puffing of whoever manages France's Twitter account, from one of the sharpest analysts, Ambrose Evans-Pritchard:

"For three years the EU has treated Brexit chiefly as a disciplinary issue. Brussels is learning late that Britain’s strategic realignment is just as much a bidding war, and Europe’s bid has come in too low.

"The Americans have swooped into the vacuum. They have wooed this nation with sweet whisperings. Unless the Europeans attempt some seduction themselves – and I would not count on it – Washington will steal the diplomatic prize from under their noses. ..."

Posted by Lex 2019-08-28 15:53|| 2019-08-28 15:53|| Front Page Top

#8 Ambrose Evans-Pritchard... no comment.

You are not "free from financial obligations to the bloc" by simply walking away.

Seriously, British common sense has left the building. Even US and Arab banks are held to due diligence. Not only will a perceived sovereign default weigh the UK down, a no deal Brexit will cause economic havoc, and the chance Scotland will rebel is real. The UK might even lose Northern Ireland.

Once the deal is done, we'll see how "favorable" US conditions will be. The UK will be in a lousy position to negotiate with anyone.

It's obvious that the EU will not allow the UK to leave on favorable terms, simply pour décourager les autres.

If Boris pushes this through the price to be paid will be high.

Posted by European Conservative 2019-08-28 16:41|| 2019-08-28 16:41|| Front Page Top

#9 Is it really such a 'diplomatic prize' though ? I hope American taxpayers don't end up paying the Queen's dog-grooming bills. Just saying.

Posted by Dron66046 2019-08-28 16:41|| 2019-08-28 16:41|| Front Page Top

#10 The purpose of these claimed commitments is not clear to me — if someone would explain, I would be grateful.

Are these owed monies for what has been done or accrued in the past, and so this is a final totting up of accounts, putting an underline on total debts and credits as of the date Britain leaves the group?

Or are these monies owed for agreements made over the course of the European Common Market — that morphed unto the EU — supporting agreements into perpetuity, agreements to which Britain will no longer be party following separation, whether to its benefit or detriment?

If the former, that is one negotiation, and I am inclined to agree with European Conservative, though I know that is not how negotiations work under changed conditions. If the latter, however — and given the punitive attitude of Brussels, Germany and France, that is what the situation feels like — then we’re looking at an attempt to force something as unfair as the Treaty of Versailles was to Germany following the first world war.

Posted by trailing wife 2019-08-28 16:49|| 2019-08-28 16:49|| Front Page Top

#11 Future speech by Trump ;

"Look, they'll have to get over the past. A lot of royal pedicures. Heating bills, travel... yes. A lot of pedicures. It won't do. A lot of pedicures."

Posted by Dron66046 2019-08-28 16:54|| 2019-08-28 16:54|| Front Page Top

#12 Taking anything Ambrose Evans-Pritchard prints is only good for spare toilet roll.

Posted by Bright Pebbles 2019-08-28 16:58|| 2019-08-28 16:58|| Front Page Top

#13 @tw
The payment includes:
1) The UK’s contribution to EU annual budgets up to 2020;
2) Payment of outstanding commitments; and
3) Financing liabilities up to the end of 2020.

The UK signed up to the EU’s budget framework when it became a member; budgets are not calculated year by year. The EU budget is a “legal act” and is over a seven year span. The last one started in 2014 and it ends in 2020. So, when Britain leaves the EU it will still be liable to pay its share for the remaining time—from November 2019 until the end of 2020.

Even if Britain leaves in 2019, if there are projects it agreed to contribute to that are meant to be completed by 2030, it would still have to pay for what it promised to fund at the time. This is the same for if a project in the UK was meant to be completed by 2030—EU members would have to continue paying the UK.

The agreed upon sum (39 bn Euros) has already been reduced because Brexit was delayed from 29 March to 31 October, So some of that money has been paid as part of the UK's normal membership contributions, which means it is no longer part of the "divorce bill".

It's not clear what will happen if the UK simply refuses to pay anything, but the EU will not begin trade negotiations before the issue of financial obligations, citizens' rights and the Irish border have been resolved.

Posted by European Conservative 2019-08-28 17:09|| 2019-08-28 17:09|| Front Page Top

#14 Thank you for explaining, European Conservative. I shall have to consult Mr. Wife about how he would handle such a thing from the private sector, although he has negotiated contracts with government entities as well.

Posted by trailing wife 2019-08-28 17:57|| 2019-08-28 17:57|| Front Page Top

#15 The private sector would usually have contract which exactly regulate these sort of things.

A EU member leaving the EU without a deal is a novelty. But in the end it comes to "pacta sunt servanda".

Posted by European Conservative 2019-08-28 18:03|| 2019-08-28 18:03|| Front Page Top

#16 Again, I cannot think of a single American bank or sovereign risk analyst working for American banks who would make a significant change to his assessment of British sovereign risk based on Britain's decision to reverse their - in retrospect, very unwise - decision to join the EU.

Especially because it appears likely that Britain will be swapping out one major trading bloc for another, US-based one that will in all probability be at least as beneficial, long-term, to the British economy.

Posted by Lex 2019-08-28 18:29|| 2019-08-28 18:29|| Front Page Top

#17 EC: contracts must be honored

Yes, and sometimes they're honored in the breach, as Hamlet put it. Banks, corporations, governments break contracts often. The ultimate question - which neither of us can answer now but time and events will definitely answer for us - is the relative attractiveness of British sovereign debt to the major international borrowing institutions.

Britain is in a good position, as is the US.

The rest of the world's economic sovereigns are relatively unattractive to international lenders/investors and will remain so for many years to come. Europe's growth is lame, its political prospects are poor, and it faces extreme uncertainty and risk due to demographic threats from the south and political and military threats from Russia. Britain is at least as attractive a risk as any EU nation.

China's trajectory has been halted, and is likely to reverse.
Japan is Japan.
The other major nations' economies are simply too small, their debt markets too sparse, to offer anything near the size and liquidity that Britain and the US offer.

You are seriously misreading the power balance here.

Start thinking like an investment banker at BlackRock or Citibank.

There are very few attractive investments combining low risk and decent returns available to the big funds. Britain post-Brexit is one of them.

Posted by Lex 2019-08-28 18:39|| 2019-08-28 18:39|| Front Page Top

#18 It's extremely unlikely that the U.S. could replace the EU in that regard, and even if it did, that's just swapping one dependency for another, and the UK will face stiff competition from Commonwealth nations which will flood Britain's markets.

Posted by European Conservative 2019-08-28 18:42|| 2019-08-28 18:42|| Front Page Top

#19 Re the financial obligations: obviously, Britain will pay something, and the EU will have to accept a haircut.

This is simply a negotiation.

Posted by Lex 2019-08-28 18:42|| 2019-08-28 18:42|| Front Page Top

#20 "will face stiff competition from Commonwealth nations"

What are talking about?
You mean Britain's wool merchants will be swamped by Aussie sheep farmers? What century are you living in?

Britain's economy is heavily service- and tech-based. Not resource-based a la Canada and Australia.

Which "Commonwealth" finance, pharma and other service giants are you talking about? Bank of Bermuda?

Posted by Lex 2019-08-28 18:46|| 2019-08-28 18:46|| Front Page Top

#21 The EU, taken as a whole is the UK’s largest trading partner. In 2018, UK exports to the EU were £289 billion (46% of all UK exports). UK imports from the EU were £345 billion (54% of all UK imports).

Posted by European Conservative 2019-08-28 18:47|| 2019-08-28 18:47|| Front Page Top

#22 An EU member leaving is a novelty altogether, European Conservative.

This triggered an interesting discussion at home: I read your statement to Mr, Wife, who turns out to be strongly pro-EU. He agrees with you, stating also that a lot of Britain’s pre-Brexit economic problems result from their own anti-competitive laws and the abysmal education of the working masses. Western factories no longer need many uneducated coal shovelers and broom pushers, but highly trained technicians to oversee mechanized manufacturing systems; the low paid, poorly educated workers of the Third World will do the other kind of work for much less. But also that much of the mass of laws created in Britain/EU explicitly to protect workers functions instead to incentivize companies not to hire — even in a country like Germany that is producing the highly trained workers modern manufacturing requires.

So in my opinion this is about considerably more than just how to break up the EU; it’s about entirely renegotiating the relationship between Western governments and their citizenry. Brexit is only one small part of it.

Posted by trailing wife 2019-08-28 18:53|| 2019-08-28 18:53|| Front Page Top

#23 Hmmm... that's interesting. Also scary.

Posted by Dron66046 2019-08-28 19:01|| 2019-08-28 19:01|| Front Page Top

#24 @tw
Only the EU can stand up to an emerging superpower like China (and yes also to the U.S.).

28 states achieve nothing independently these days. The EU needs to be reformed thoroughly, but Britain's choice is unwise. Sure, they will survive, but the idea that they could only prosper outside the EU is foolish.

Somehow I don't think the British realize what they are doing.

Posted by European Conservative 2019-08-28 19:03|| 2019-08-28 19:03|| Front Page Top

#25 Foreign trade as a % of US GDP is exceptionally low.

The US could easily increase that percentage through a free trade agreement with the U.K. that would greatly benefit both nations.

Posted by Lex 2019-08-28 19:06|| 2019-08-28 19:06|| Front Page Top

#26 Somehow I don't think the British realize what they are doing.
Posted by European Conservative

I think they know EXACTLY what they're doing. They're tired of future failed Euro Country domination by unelected/unaccountable bureaucrats and French/German bullying. Hungary, Poland, et al are following closely, and that's what the EU is most afraid of. Loss of control, prying the boot off the neck

Posted by Frank G 2019-08-28 19:14|| 2019-08-28 19:14|| Front Page Top

#27 EC - the EU, like so many of the late 20c elite's neoliberal notions, was founded on several grand illusions.

In fact, nationhood and locality matter, hugely, to the citizenry.
The "global citizen" ideal is bullshit.

Military strength and the willingness to spend significant sums to continuously upgrade it also matter, hugely. The liberal notion of peaceful relations-through-economic integration is bullshit. (Even a liberal democratic Russian government would be throwing its weight around today and threatening its neighbors.)

Finally, most ominously, our technological advances will kill the EU and left/Lib global elites' fantasy of combining multicultural, "open societies" with an exceedingly generous welfare state. Can't have both. Pick one.

Britain is making the hard choices that the EU and liberal globalist elites either cannot see or see but refuse to confront honestly.

Joining the US in a free trade agreement may not be ideal but it is preferable to sticking with an EU whose strength and internal coherence are declining steadily. It's the best option facing Britain.

Posted by Lex 2019-08-28 19:15|| 2019-08-28 19:15|| Front Page Top

#28 We bailed out European banks and investment houses in the '08 collapse because they had Freddie Mae and Fannie Mae papers which were clearly not backed by the US government. It was an assumption on their part. Instead the Uniparty decided to rescue them. That debt was placed upon the American taxpayer by increasing the debt. I see no reason any of that should ever be repeated again if the EU wants to play hard ball. Go for it.

Posted by Procopius2k 2019-08-28 19:15|| 2019-08-28 19:15|| Front Page Top

#29 #24 @tw
Only the EU can stand up to an emerging superpower like China (and yes also to the U.S.).

Like they stand up to Iran? *Snicker*

Posted by Frank G 2019-08-28 19:16|| 2019-08-28 19:16|| Front Page Top

#30 We'll see about all that in 5 years.

Posted by European Conservative 2019-08-28 19:19|| 2019-08-28 19:19|| Front Page Top

#31 One thing is for sure if brexit really happens. And for me it's still an 'if'.

Posted by Dron66046 2019-08-28 19:27|| 2019-08-28 19:27|| Front Page Top

#32 No, the EU will survive Brexit. If it fails, Brexit won't be the reason.

Posted by European Conservative 2019-08-28 19:31|| 2019-08-28 19:31|| Front Page Top

#33 Bigger is safer said the people on the titanic...

Only better is safer,,,

Only sovereignty and not having to ask 28 countries for permission is going to help.

The EUSSR will be dead in 10 years and it will be 10 hellish years for those stuck in it.

Posted by Bright Pebbles 2019-08-28 19:50|| 2019-08-28 19:50|| Front Page Top

#34 Grand 20c Illusion #4 was that the EU and the UK need each other in order to be free and prosperous.

The EU will continue to muddle along without the UK, and the UK will continue to muddle along without the EU.

Posted by Lex 2019-08-28 19:54|| 2019-08-28 19:54|| Front Page Top

23:02 European Conservative
23:01 trailing wife
22:46 crazyhorse
22:43 trailing wife
22:29 DarthVader
22:18 SteveS
21:43 Lex
21:40 JohnQC
21:30 Lex
21:14 European Conservative
21:13 European Conservative
20:59 Vernal Hatrick
20:38 trailing wife
20:29 Procopius2k
20:17 trailing wife
20:10 trailing wife
20:10 gorb
20:09 Phaick Uneretle6310
20:04 gorb
20:00 Fat Bob Javish1936
19:54 Lex
19:50 Bright Pebbles
19:49 bbrewer126
19:42 Vernal Hatrick