Until Theresa May agrees to settle Britain’s financial commitments to the bloc, European Union officials are ruling out any discussions with U.K. Prime Minister Theresa May over a post-Brexit trade deal.
In the best-case scenario it may take until early 2018 to find common ground on the bill, two European officials familiar with the plan said in a sign the EU is toughening its stance as Britain prepares to trigger two years of negotiations.
One of the officials reportedly said that until after German elections in September, the EU may not even reveal the sum it wants the U.K. to pay and is determined to set its own pace.
“We have to resolve the British budget issue straight away,” Sandro Gozi, Italy’s junior minister for European affairs, said in an interview in Rome on Friday. “The U.K. will have to respect and fulfill all its obligations as a member state until the last day and the last pound.”
Even before the sides turn to the matter of a trade pact or without a deal, the chances of the U.K. walking away from the Brexit talks are increasing with the EU’s hard line. May’s government wants to discuss the divorce and future trading relationship at the same time and has already questioned the size and legality of any exit fee.
About 60 billion euros ($64.5 billion) is the estimated value of the bill to settle the U.K.’s liabilities. “It is not reasonable, I don’t think, for the U.K. having left the EU, to continue to make vast budget payments”, U.K. Foreign Secretary Boris Johnson told the BBC this week.
Both the officials said that before opening the door to any planning of Britain’s post-Brexit commercial links to the bloc, acceptance of the bill over the initial nine months and concrete progress in the negotiations would be insisted upon by the U.K.’s EU counterparts. U.K. would be left without any economic arrangement with the EU as the refusal to pay up would be seen as a deal-breaker for the negotiations.
As soon as May invokes Article 50 of the Lisbon Treaty, a step she’s pledged to take before the end of this month, the clock will start ticking on the two-year negotiation period.
“The situation after Brexit cannot be as profitable, as good, as the situation before Brexit,” EU Economy Commissioner Pierre Moscovici said in a TV interview in Baden-Baden, Germany, on Friday.
According to one of the officials, who said the British government has given itself little room for compromises that would facilitate a Brexit accord, as a result of the possibility of a U.K. exit from the bloc without an agreement, companies need to be prepared for business disruptions, EU is being prompted to tell the business by Britain’s rejection of the bill.
Holding up in international courts, European demands for the country to meet its financial commitments to the bloc would be legally solid, says a confident EU, in the event of a U.K. departure without a deal. The official said that by engaging in a legal battle over money while seeking to forge new economic relationships with the rest of the world, London would complicate post-Brexit life.
(Adapted from Bloomberg)