UK Cabinet Poised To Increase Brexit Divorce Payment By Another 20 Billion Euros

Tyler Durden's picture

Theresa’s May’s government is poised to concede an improved Brexit settlement offer to gain EU approval to move the negotiations on to the next stage.

May reportedly has the backing of senior ministers ahead of a critical cabinet meeting on Monday afternoon. The list of senior ministers is thought to include chancellor, Philip Hammond, Brexit secretary, David Davis, environment secretary, Michael Gove and weakened foreign secretary, Boris Johnson, who famously said in July that the EU could “go whistle” over a divorce settlement. Hammond said at the weekend “we’ve always been clear it won’t be easy to work out that number, but whatever is due, we will pay”. Press reports suggest that the UK will formally offer about 40 billion Euros, versus the previous 20 billion. The news caused Sterling to rise more than half a percent to a two and a half week high of 1.3272, its strongest level since 2 November 2017. According to Bloomberg.

The U.K. could be about to improve its financial offer to the European Union ahead of a crucial meeting of the bloc’s leaders in December. Members of Prime Minister Theresa May’s divided cabinet will consider Britain’s divorce from the EU at a meeting Monday afternoon of the Brexit sub-committee that could be key to unlocking the most controversial matter in the negotiations -- money. Britain is “on the brink of making some serious movement forward” and starting to break the “logjam,” Chancellor of the Exchequer Philip Hammond told the BBC on Sunday. While Hammond is among the most pro-European members of cabinet, his suggestion follows Brexit Secretary David Davis’s hint from Berlin on Friday that more details on a financial settlement would be presented within weeks. With businesses clamoring for clarity and the departure just 16 months away, pressure is mounting to break the impasse.

The impact of a 40 billion Euros settlement offer is hard to judge as it likely to fall short of the EU’s demands, while it might enrage a substantial proportion of the British public. Bloomberg continues.

The EU is pushing for Britain to pay at least 60 billion euros ($71 billion) to cover budgetary commitments and future liabilities such as pensions for EU civil servants. So far, May has said she will make 20 billion euros of budget payments after Brexit, and is going through the other items line by line. The Times said that while the government wouldn’t put a figure on it, it was likely to add another 20 billion euros to what it’s already agreed to. There’s a risk that might not be enough to unblock talks. It’s also unlikely to go down well domestically. “If we start saying that we’re going to give 40 to 50 billion to the EU, I think the public will go bananas, absolutely spare,” Robert Halfon, a Conservative lawmaker and former minister, said late Sunday in a BBC radio interview. “That is going to be very difficult if it is going to be that sum, amount of money.” Halfon has a point: one of the main messages of the pro-Brexit wing in last year’s referendum was that it would put an end to sending large sums of money to the EU, and polling shows the British public are adverse to paying a large exit bill. A YouGov poll in September found that even a bill of 20 billion pounds was unpalatable to 63 percent of voters surveyed.

Time is running out for the financial settlement to be agreed if it is to be approved at the next EU Council meeting in mid-December. After meeting Prime Minister May on Friday, EC President Tusk indicated that early December was the deadline. As Bloomberg explains.

“We are waiting for a substantial offer from the British,” Dutch Foreign Minister Halbe Zijlstra said on Monday.

 

“It has to be concrete and on the table instead of in the press”

 

Time is pressing on Britain to come up with an improved offer after EU President Donald Tusk said early December would be “the latest” for additional concessions on the bill if talks are to advance beyond the divorce and on to future trading arrangements after a mid-December summit. “We will make our proposals to the European Union in time for the council. I am sure about that,” Hammond said in an interview with the BBC on Sunday. Asked if time was running out for the U.K. to make an improved offer on its exit payment, he replied that “the council is in three weeks, so, yes.”

With the deadline approaching, the posturing by both sides is ratcheting up and an agreement – or otherwise – will probably go down to the wire.

The process has been complicated along the way by what sometimes looks like a game of brinkmanship. In an interview with the BBC, Davis insisted that Britain has “made all the running” and that now “I want them to compromise,” meaning the EU. Tusk responded by saying he found that position laughable: “I really appreciate Mr. Davis’s English sense of humor.”

Another point is that success or failure could well be decided at the highest political levels and relatively last minute. In Berlin on Friday, Davis said “we’ll make some decisions, political decisions, later on.” The stalemate in Brexit talks is dragging on as EU leaders refuse to discuss a future trade deal with the U.K. until sufficient progress is made on money, guaranteeing rights of citizens, and the Irish border.

Ahead of today’s cabinet meeting, an MP from May’s party warned her not to “play Santa Claus” to the EU. As the BBC reports.

The UK government cannot afford to "play Santa Claus" to EU bosses by handing over billions of pounds, a Conservative MP says. Nigel Evans accused the EU of demanding "ransom money" from Theresa May to move Brexit negotiations forwards. He was speaking ahead of a meeting between Mrs May and senior ministers to try to make progress on the stalled talks.

This was May leaving church with her husband in a red coat on Sunday.

It’s been clear that EU bureaucrats were determined to extract the maximum possible settlement to punish the UK for leaving. However, the sudden weakening in Merkel’s position, after her failure to negotiate a new coalition government, might shake Brussels’ hardline approach enough to get a compromise deal over the finishing line.

We never fully bought into the “Merkel is May’s ally” narrative, but time will tell.

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Racer's picture

Taking the money from the cold dead hands of the disabled and poor people the Nasty Party have murdered to give more money to the EU....

medium giraffe's picture

Yeah, and where is that money going?  To the citizens of the EU?  Hahahahahaha!

God Emperor's picture

Yes, to the new citizens of EU.

those shipped in by Soros' NGOs.

Euro-Serfs, you need to fund the lifestyle of the new europeans so they could chop off your heads and rape your daughters as soon as they can

eforce's picture

May's cabinet = Viche government.

MozartIII's picture

Don't pay the leeches a dime. Just leave already!!

JRobby's picture

Treasonous, wholly owned tools of the elite "structure".

They swore an oath to the UK did they???????

dunroamin's picture

It's going to pay fat cat Eurocrat pensions apparantly.

Eyes Opened's picture

I believe EU is holding out for custody of the toaster.... & the dog...

chubbar's picture

Does anyone at ZH have a more or less educated reason that the UK has to pay the EU for leaving? Why can't they just tell the EU to go pack sand? Give them a take it or leave it offer and then LEAVE. Let the fucking idiots in Brussels to figure it out. Trade works both ways and if the EU doesn't want to trade with the UK then fuck em, the UK should make trade agreements with other nations or the individual countries that make up the EU. I'll be a lot of those countries like Italy would tell the EU to pack sand as well, given the opportunity.

God Emperor's picture

So the UK businesses can have a piece of the pie called trading with the EU

EU is blackmailing UK with future tariffs and promise of not making trade deals..since the EU serfs trade as a block not as independent countries.

GreatUncle's picture

Tarrifs issue is all bullshit - you apply exactly the same tarrifs to the EU.

So nothing changes.

As for trading with the EU, you want to pay for UK goods then you will have to pay for them as simple as that.

MozartIII's picture

Plenty of others that they can trade with. They really don't need the EU. The EU needs them.

Shropshire Lad's picture

Since the UK buys twice as much from the EU countries as they buy from the UK, the EU has twice as much to lose if trade ceased as was substantially obstructed.  The EU negotiating blackmail needs to be resisted fully.  The EU countries have so much more to lose.

Funn3r's picture

It's like any sizeable organisation, they make plans extending well into the future. It's not they suddenly decide "hey you know what let's build a dam", in fact it's planned years in advance. We already committed to future projects which we agreed to put money into so we have to honour those promises. Also there are costs which will continue even after/if we leave such as pension payments from MEPs and other officials covering the time when UK was as member.

I guess we maybe could just take your advice about telling them to pack sand but nobody would ever do any deal with the UK ever again, so it would not make great sense.

ebworthen's picture

Just leave - what is this bullshit about paying to leave?

Does Britain have sovereignty or not?

Madness.

FullHedge1's picture

Exactly. What's the EU going to do? Impose sanctions? Who gives a shit. The US, Russia, and China could be huge trading partners.

FullHedge1's picture

And BTW,  not like Germany ever paid for its WWI "war crimes". What did GB ever do other than take in a bunch of Muslims? Stupid.

BarkingCat's picture

If I recall correctly Germany did not attack Britain in WWI.

Although it is very possible that thanks to Germany's attack on Russia, the latter fell to a Marxist revolution.

detached.amusement's picture

as arbitrary and capricious as pizza the hutt's million spacebucks

GreatUncle's picture

Far better any agreement made by parliament "cannot bind a future one".

So whatever they agree on the population can renage on ...

Not my government ... fuck em ... I am not being and indentured servant to some EU dictator because some corrupt criminal politican in parliament decides it.

kellys_eye's picture

The UK holds the entire future of the EU in its finincial hands.  Every £10bn the EU can squeeze out of the UK is another 'year' of survival for the dictatorship (assuming other factors don't bring about the collapse first) and for the media to report the UK as 'being on th back foot' is propagada that is transparently false.

We could be doing the other countries of Europe a favour by bringing the house down.

buzzsaw99's picture

that's cheap.  do it.  when you're on board the titanic and someone agrees to let you off at the last minute for a hundred pounds how long do you have to think about it?  either that or jump, but get the hell off.

AlphaSeraph's picture

"The EU is pushing for Britain to pay at least 60 billion euros ($71 billion) to cover budgetary commitments and future liabilities such as pensions for EU civil servants."

And this is where the British should whip out the "pitch forks and torches"

Havoc Squad's picture

"The EU is pushing for Britain to pay at least 60 billion euros ($71 billion) to cover budgetary commitments and future liabilities such as pensions for EU civil servants."

" to cover budgetary commitments and future liabilities such as pensions for EU civil servants."

"future liabilities such as pensions for EU civil servants."

"EU civil servants."

FUCK THOSE LEECHFUCKS

AlphaSeraph's picture

"FUCK THOSE LEECHFUCKS"

yep that was my point.

BarkingCat's picture

"The EU is pushing for Britain to pay at least 60 billion euros ($71 billion) to cover budgetary commitments and future liabilities such as pensions for EU civil servants."

 

Silly me, I read "budgetary commitments" as "bribery commitments".


VZ58's picture

Well you have to actually want to leave...May and her clowns don't actually want to leave...Hopefully with Merkel flailing now it will happen.

desirdavenir's picture

OR... UK could give EU a few territories here and there... Gibraltar (€2bn), Malvinas (€.5bn -- let's be realistic...), etc. 

 

buzzsaw99's picture

be glad the eu scumbags want to be paid in euros. 

you want euro?  sure, we could do that.  lulz

buzzsaw99's picture

btw - you're gonna give brit bob a heart attack talking like that.

desirdavenir's picture

I think I found the ultimate BB reppellant. 

msamour's picture

I see what you are doing there. ;) trying to get BritBob to lose it? I am surprised he hasn't jumped on your comment yet...

BarkingCat's picture

Probably jumping on some little boy's ass instead

jal's picture

Leave, it will be cheaper and less painfull than paying the demands.

bh2's picture

Why the British government continues to put up with being ragged on to pay ransom remains a mystery. And if they do, there's no assurance the EU will offer a trade "deal" worth having.

As Churchill said, choose the open sea, Britain, and revert to WTO.

Herdee's picture

The paranoid bankers tell the politicians what to do. The unsettled derivatives positions will bust everything wide open.

DavidC's picture

"This was May leaving church with her husband in a red coat on Sunday".

No it wasn't, it was dark blue, hers was red...

(Tee hee!)

DavidC

flacorps's picture

Stop paying their taxes and enforcing their rules. As far as I know they haven't built any V-3s in Germany.

JoeTurner's picture

Uk should grow a pair and just tell the EU to f-off....let the chips fall where they May(pardon the pun)

To Hell In A Handbasket's picture

My beloved UK, has been so use to dealing with 3rd world nations and signing one sided trade treaties favouring us, that we have completely forgotten what it is like negotiating with an equal partner. 

  • We can't bribe, cajole, or coerce some tin pot dictator, or minister tasked with brokering a trade deal. 
  • We can threaten the E.U with threats of stopping aid, if they don't sign the deal
  • We cant threaten E.U members to freeze their offshore bank accounts and we'll turn a blind eye if they sign a trade deal favouring us, as we do to 3rd world leaders.

The UK has no fucking leverage in this negotiation and this cold harsh reality, is not the norm for us. We are out of options and our trousers are around our ankles.  Is a no deal an option? Even by conservative estimates, this will effect  1 in every 5 families. They don't want every 5th family to be telling stories how their job was ruined, shipped abroad, less wages, because the optics will look bad. We are fucked out of the E.U and we were fucked in the E.U. We are fucked if trade is anywhere near fair. What do we export, where a similar quality cannot be sourced? Not much. 

shovelhead's picture

We can always get melamine flavored Cheddar from China.

JDFX's picture

Thats cheap, offer £200 billion for what you want . We gave a few banks £850 billion .... This is a minor distraction..  

gespiri's picture

HAHAHAHA.......!!!!  It's pretty obvious and blatant that May is working for the EU swamp!  Another 20bgbp to be paid by the tax payers without even voting on it.  I wonder how much percentage will she get from that....

hooligan2009's picture

Mrs May and the tory cabinet.

Message number 1: It's not your fucking money to give away.

Message number 2: Get the 250 billion euros back that the UK has paid in to the EU since 1973

Message number 3: Farage's UKIP did so well by draining Labour voters hostile to Europe get Farage involved and even Labor brexiteers.

Message number 4: get rid of illegal immigrants from outside the EU.

Mesage number 5: sack half the NHS administrators and give medical professionals a 20% pay rise.

Message number 6: run 2% fiscal surpluses for the next 40 years.

Message number 7. pull all troops back home from overseas.

Message number 8: stope sending 15 billion a year overseas and spend it on legal migrants in britain that need it.

that's it

fuck you very much

yours

a hater of libtard socialists like you and a despiser of corbyn and that insane fruitcake from the brighton pavilion.

To Hell In A Handbasket's picture

Message 6 and 7 was straight out of a Camden Town comedy club.

  • 6  is impossible.
  • 7  is a money making scheme and our presence abroad ultimately rakes in more money than we spend. Look at our oil deals in Libya vs our expenditure. 
hooligan2009's picture

if it is possible to have run 2-9% deficits for 40 years, it is possible to do the opposite.

it is spineless to suggest otherwise.

regime change (anti-libtard socialism) is required from all political parties that have lurched wat too far towards socialism and debt servitude at the national, provincial, local and individual levels.

GreatUncle's picture

And that is why the next 40 years will be the same ...

The system is designed this way so all promises for a better future are off.

 

OverTheHedge's picture

I'm sorry, but you need to look at how money is created, and how debt comes about, and why in order to have constant growth,we NEED to have constantly increasing debt to go alongside it. It is not impossible to run a 2% surplus for 40 years because of political failure, it is impossible because of the MAD money system (see Radical Marijuana for Money As Debt, and its implications).

Once you get your head around where money actually comes from, and who creates it, and why, you will be a lot more cynical, and a lot less likely to believe that any of this shit is fixable.

hooligan2009's picture

your argument is based on "creeping socialism" since the permenent deficits and accumulated debt represent increases in welfare benefits, net half a million of immigration and expeansion of free health care, not "creation of value".