ChatterBank2 mins ago
There's A Hole In My Budget Delilah..
.. and should the UK finance it?
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Grommit: May has offered 20 billion and Macron has said that isn't even half enough, it isn't to do with your figures - which are wrong anyway, it's because the EU has a massive financial black-hole, whether Britain leaves or not, and they are hoping to 'fine' them in order to get the funds to plug it.
Khandro
Not sure who is the most confused, you or the Express.
The UK leaves the EU in March 2019, and will pay a settlement somewhere between €20-€60 Billion. The EU has a deficit in its budget and the UK leaving has nothing to do with that.
You and the Express seem to be insinuating (without producing any evidence) that the difference between the UK figure and the EU figure is because the EU is inflating its bill to plug its deficit. That is of course nonsense. It will likely be settled by independent arbitration any, so even as a daft theory, it doesn’t hold up.
Not sure who is the most confused, you or the Express.
The UK leaves the EU in March 2019, and will pay a settlement somewhere between €20-€60 Billion. The EU has a deficit in its budget and the UK leaving has nothing to do with that.
You and the Express seem to be insinuating (without producing any evidence) that the difference between the UK figure and the EU figure is because the EU is inflating its bill to plug its deficit. That is of course nonsense. It will likely be settled by independent arbitration any, so even as a daft theory, it doesn’t hold up.
// The Financial Times in November 2016 originally reported that the European Commission was seeking an exit bill of €60 billion, based on comments by Michel Barnier, the EU’s chief negotiator on Brexit. In February, the same author writing for the Centre for European Reform (CER) estimated that the bill could range from €25–73 billion. Bruegel have given a similar range for the bill, at €25.4–65.1 billion. Most recently, Alex Barker, writing again in the Financial Times, put the net bill at €55–75 billion, based on a €91–€113 billion gross figure.
How did they work out the figures for this divorce bill?
Calculations are based on what we owe, and what we can offset. The quoted figures have a large range due to varying methodologies of calculating the bill. The lower band €25 billion represents minimal obligations to the EU and maximum UK receipts, while the top-end €75 billion comes from maximising the UK’s obligations and minimising its receipts. The gross figures of €100 billion includes some extra obligations and does not take any account of any receipts owed to the UK.
The UK’s obligations can be categorised under various headings:
1. Outstanding budget commitments
The EU Budget operates through a multi-annual spending structure, which means projects are paid for over a period of several years. As a result, EU Budget payments are back-loaded and many will be paid out post-Brexit. For example, a key element of EU spending allocations consists of cohesion fund payments, aimed at raising living standards in the 2004 Accession countries. According to the CER, only 25–30% of the biggest cohesion fund payments will actually have been spent by the time Britain is expected to leave the EU in April 2019.
The current EU Budget period runs from 2014–2020, finishing a year after the UK’s exit date. A key point of legal uncertainty is the status of financial commitments scheduled for 2019 and 2020. The UK has indicated that it only expects to fund its budget commitments up until April 2019. However, the Commission's methodology is clear that the UK should meet the full schedule of obligations up until 2020.
2. EU officials’ pensions
Like the UK civil service pension scheme, the Pension Scheme of European Officials (PESO) is an unfunded scheme and operates on a ‘pay-as-you-go basis’, with costs being covered by the annual EU Budget as they arise. The Commission outlines that the UK should make a payment to cover the costs associated with this scheme, as they appear in the EU's consolidated accounts at the time of the UK's withdrawal. There have been suggestions that the UK could push for this liability to simply cover the costs of UK nationals working for the Commission, lowering the bill due to the under-representation of British officials. The Commission's methodology suggests that the EU would contest such an approach.
3. Contingent liabilities
The EU incurred contingent liabilities while the UK was a member state. These liabilities effectively constitute payments that would be triggered in specific circumstances only, for example, Ukraine defaulting on its EU loan. When the 2015 EU accounts were drawn up, outstanding loans to Hungary, Ireland, Portugal and Ukraine collectively amounted to €49.5 billion. The EU’s latest approach asks the UK to make a lump-sum payment upfront to cover these liabilities, in case they materialise in the future. This increases the upfront divorce bill by €9–12 billion. However, these upfront liability payments would be reimbursed over the coming years, enabling the UK to recover some of this money.
4. Other costs of withdrawal
The Commission’s negotiating mandate also includes the “specific costs related to the withdrawal process”. This would cover the relocation of the two London-based EU agencies after Brexit; the European Banking Authority and the European Medicines Agency. Other costs include the decommissioning of the Joint Research Centre nuclear sites and funding
How did they work out the figures for this divorce bill?
Calculations are based on what we owe, and what we can offset. The quoted figures have a large range due to varying methodologies of calculating the bill. The lower band €25 billion represents minimal obligations to the EU and maximum UK receipts, while the top-end €75 billion comes from maximising the UK’s obligations and minimising its receipts. The gross figures of €100 billion includes some extra obligations and does not take any account of any receipts owed to the UK.
The UK’s obligations can be categorised under various headings:
1. Outstanding budget commitments
The EU Budget operates through a multi-annual spending structure, which means projects are paid for over a period of several years. As a result, EU Budget payments are back-loaded and many will be paid out post-Brexit. For example, a key element of EU spending allocations consists of cohesion fund payments, aimed at raising living standards in the 2004 Accession countries. According to the CER, only 25–30% of the biggest cohesion fund payments will actually have been spent by the time Britain is expected to leave the EU in April 2019.
The current EU Budget period runs from 2014–2020, finishing a year after the UK’s exit date. A key point of legal uncertainty is the status of financial commitments scheduled for 2019 and 2020. The UK has indicated that it only expects to fund its budget commitments up until April 2019. However, the Commission's methodology is clear that the UK should meet the full schedule of obligations up until 2020.
2. EU officials’ pensions
Like the UK civil service pension scheme, the Pension Scheme of European Officials (PESO) is an unfunded scheme and operates on a ‘pay-as-you-go basis’, with costs being covered by the annual EU Budget as they arise. The Commission outlines that the UK should make a payment to cover the costs associated with this scheme, as they appear in the EU's consolidated accounts at the time of the UK's withdrawal. There have been suggestions that the UK could push for this liability to simply cover the costs of UK nationals working for the Commission, lowering the bill due to the under-representation of British officials. The Commission's methodology suggests that the EU would contest such an approach.
3. Contingent liabilities
The EU incurred contingent liabilities while the UK was a member state. These liabilities effectively constitute payments that would be triggered in specific circumstances only, for example, Ukraine defaulting on its EU loan. When the 2015 EU accounts were drawn up, outstanding loans to Hungary, Ireland, Portugal and Ukraine collectively amounted to €49.5 billion. The EU’s latest approach asks the UK to make a lump-sum payment upfront to cover these liabilities, in case they materialise in the future. This increases the upfront divorce bill by €9–12 billion. However, these upfront liability payments would be reimbursed over the coming years, enabling the UK to recover some of this money.
4. Other costs of withdrawal
The Commission’s negotiating mandate also includes the “specific costs related to the withdrawal process”. This would cover the relocation of the two London-based EU agencies after Brexit; the European Banking Authority and the European Medicines Agency. Other costs include the decommissioning of the Joint Research Centre nuclear sites and funding
...British seconded to European schools until 2021.
The detail of all the headings that the Commission has put on the table is set out in its working paper “Essential Principles on Financial Settlement”, published on 24 May. Reports from Brussels suggested that the Commission’s original position was toughened up by member states in internal discussions to include, for example, continued support for CAP payments. //
The detail of all the headings that the Commission has put on the table is set out in its working paper “Essential Principles on Financial Settlement”, published on 24 May. Reports from Brussels suggested that the Commission’s original position was toughened up by member states in internal discussions to include, for example, continued support for CAP payments. //
Outstanding budget commitments would be a valid reason to claim money was owed except we've yet to see any evidence presented by the EU where we signed up to keep paying if we were no longer an EU member. Whether the EU has failed to sort their funding or not, is hardly our concern. If they don't get the income they anticipated it is their responsibility to either find it from elsewhere or slow down on their anticipated project spend. If they could show where the UK signed up to keep paying when no longer a member, and there would be no dispute. (As there wouldn't if they gave up their attempt to grab money from us, either.)
EU pensions are hardly worth discussing and giving a level of respectability it doesn't deserve. When you leave somewhere you stop paying for it's bills. Pensions are not an exception. If something is pay-as-you-go, and the payer has gone, that's the end of that funding. Again, it's up to the EU to find new funding to cover the loss of anticipated income. (Maybe take on another paying member as replacement ? Turkey has shown interest in the past.)
Contingent liabilities are in the same boat. If the contingency didn't occur whilst a country is a member then that country is no longer responsible for it when they are no longer part of the scheme.
Costs of withdrawal will exist, the EU pays for the costs they run up, the UK pays for the costs it accumulates. (Is the EU offering to pay for the UK costs ?) There is no provision for stinging the UK for the EU bills. They could avoid a lot of costs by decoupling projects and groups and suchlike that would be of interest to countries both in and out of the EU, since by definition common interest things are not EU specific, and so wouldn't change as the EU membership changed.
This all sounds like a load of excuses to grab money to which the EU is not entitled, to me. I think that it's a fair assumption to believe that it is to cover any budget black hole they failed to avoid.
And were this to be different, and costs not left behind, then Article 50 would have detailed any ongoing/continuing commitments, (and probably been rejected as an exit procedure as a result) but the fact is it didn't.
Quite honestly, if there was a case to answer then the EU would be pressing hard for independent legal arbitration (if you can find anyone which doesn't have a vested interest or opinion already) and they are not.
EU pensions are hardly worth discussing and giving a level of respectability it doesn't deserve. When you leave somewhere you stop paying for it's bills. Pensions are not an exception. If something is pay-as-you-go, and the payer has gone, that's the end of that funding. Again, it's up to the EU to find new funding to cover the loss of anticipated income. (Maybe take on another paying member as replacement ? Turkey has shown interest in the past.)
Contingent liabilities are in the same boat. If the contingency didn't occur whilst a country is a member then that country is no longer responsible for it when they are no longer part of the scheme.
Costs of withdrawal will exist, the EU pays for the costs they run up, the UK pays for the costs it accumulates. (Is the EU offering to pay for the UK costs ?) There is no provision for stinging the UK for the EU bills. They could avoid a lot of costs by decoupling projects and groups and suchlike that would be of interest to countries both in and out of the EU, since by definition common interest things are not EU specific, and so wouldn't change as the EU membership changed.
This all sounds like a load of excuses to grab money to which the EU is not entitled, to me. I think that it's a fair assumption to believe that it is to cover any budget black hole they failed to avoid.
And were this to be different, and costs not left behind, then Article 50 would have detailed any ongoing/continuing commitments, (and probably been rejected as an exit procedure as a result) but the fact is it didn't.
Quite honestly, if there was a case to answer then the EU would be pressing hard for independent legal arbitration (if you can find anyone which doesn't have a vested interest or opinion already) and they are not.
Don't criticise Gromit on laying out the numbers....it's not an easy situation or can be distilled into an ABC for ABers to read as a 'Dick and Dora' book or what they now call 'soundbites'. He has laid out the argument and if you can't be bothered to read and ingest it, then bloody well shut up as you don't have the facts to hand, either to support or counter the debate - which OG, rightly so, has indicated is a spread and within the answer lies.....
Bit rude, ain't you, son.
These unbiased numbers that gromit presented.
Were they from before or after the editor got an award for lying?.
https:/
These unbiased numbers that gromit presented.
Were they from before or after the editor got an award for lying?.
https:/
Meanwhile back on Planet Worth. ( With thanks to TTT for the link)
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