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

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.

Comments

Racer Mon, 11/20/2017 - 10:47 Permalink

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....

chubbar Racer Mon, 11/20/2017 - 11:21 Permalink

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.

In reply to by Racer

Funn3r chubbar Mon, 11/20/2017 - 11:36 Permalink

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.

In reply to by chubbar

kellys_eye ebworthen Mon, 11/20/2017 - 13:09 Permalink

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.

In reply to by ebworthen

buzzsaw99 Mon, 11/20/2017 - 10:49 Permalink

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 Mon, 11/20/2017 - 10:52 Permalink

"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 AlphaSeraph Mon, 11/20/2017 - 11:02 Permalink

"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

In reply to by AlphaSeraph

VZ58 Mon, 11/20/2017 - 10:54 Permalink

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.

bh2 jal Mon, 11/20/2017 - 14:54 Permalink

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.

In reply to by jal

DavidC Mon, 11/20/2017 - 11:07 Permalink

"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

To Hell In A H… Mon, 11/20/2017 - 11:17 Permalink

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. 

JDFX Mon, 11/20/2017 - 11:14 Permalink

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

gespiri Mon, 11/20/2017 - 11:17 Permalink

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 Mon, 11/20/2017 - 11:25 Permalink

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 1973Message 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 itfuck you very muchyoursa hater of libtard socialists like you and a despiser of corbyn and that insane fruitcake from the brighton pavilion.

OverTheHedge hooligan2009 Mon, 11/20/2017 - 13:10 Permalink

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.

In reply to by hooligan2009