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Courtesy of the Telegraph
Europe is threatening to keep back Britain’s final rebate payment of €5 billion as part of the negotiations over the Brexit bill, The Telegraph can disclose.Senior British sources said that negotiations over the bill, which the EU sets at €60 billion (£53.6 billion), had still not settled whether the UK would receive the €5 billion (£4.46 billion) payment as part of the final settlement when it leaves the EU in March 2019.“There is a problem here, and the issue over whether the EU will pay us the 2018 rebate has not been resolved,” the source in Whitehall confirmed.The issue of the rebate, won by Margaret Thatcher in 1984, is a key irritant between the two sides as they try to move on to trade talks next month.
Amid testy exchanges on Friday, Europe continued to pile pressure on Theresa May to increase her offer on the Brexit bill beyond €20 billion (£17.85 billion).Donald Tusk, the European Council president, warned Britain at an EU leaders’ summit in Sweden that “much more progress” was needed on the bill and the Irish border, with British concessions to be delivered “at the beginning of December at the latest”.He went on to mock David Davis, the Brexit secretary, for suggesting it was time for the EU side to make some concessions. “I can say only that I really appreciate Mr Davis’s English sense of humour,” Mr Tusk said.The EU has said it will not have prepared a fresh mandate for trade talks in January if the UK has not made concessions in good time ahead of the EU leaders’ summit on Dec 14-15. UK officials reject the timetable as artificial.
The British side also clashed with Ireland, with the Irish Taoiseach, Leo Varadkar, demanding “written” guarantees that there would be no hard border for Northern Ireland.
Britain’s EU rebate, which was designed to offset the unfair distribution of EU farm subsidies, is paid a year in arrears, meaning the final payment for 2018 would fall after Britain’s departure. British negotiators believe that there is no legal basis for denying the UK its final payment, but the European Commission is understood not to see it as part of the Brexit bill calculation. EU officials declined to comment.The Telegraph understands that the rebate came up in the opening round of Brexit bill discussions last summer, and has been raised again in more recent technical talks, but the EU side has still not provided clarity on the issue.Michel Barnier, the EU’s chief negotiator, last week issued the UK with a two-week deadline to come up with a fresh offer on the bill. Mr Barnier’s deadline expires next week and Mrs May is reported to be considering an improved offer.
The British side argues that since the country will not pay into the EU budget in 2019, the final €5 billion payment should be “netted off the final bill” when it is settled on the point of exit.