EU Hikes Brexit “Bill” To 100 Billion Drawing Angry Response From UK, Pound Slumps
Sterling slumped overnight, and tensions between the UK and Europe escalated after EU negotiators hiked their initial demand for Birtain’s Brexit bill over recent weeks, widening the divide between Brussels and London, which in turn questions whether it owes anything at all before Brexit talks start next month. Hours before chief negotiator Michel Barnier was due to give more details on the EU’s standpoint, the Financial Times said the EU might seek an upfront payment in 2019 of up to 100 billion, drawing an immediate rejection from Britain’s Brexit Secretary David Davis that he would pay that sum.
The European Commission had initially given a ballpark estimate of the bill of about 60 billion but the FT said the calculations it referred to would result in a net payment from Britain of roughly that level, after subsequent reimbursements. One senior EU official involved in preparing for the talks after a British election on June 8 said he did not recognize the 100-billion-euro figure, although a number of private calculations of the bill have gone as high or even higher.
According to Reuters, last month, the Bruegel think-tank in Brussels put the up-front payment for Britain as high as 109 billion under one of many scenarios for the calculation. Later reimbursement would bring the net figure to 65 billion, Bruegel’s study showed.
This post was published at Zero Hedge on May 3, 2017.