Tuesday 25 April 2017

Ireland faces higher EU costs if UK dodges bill

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Colm Kelpie

Colm Kelpie

Ireland faces stumping up more cash for the EU budget if the UK leaves the bloc without paying what it allegedly owes.

An EU expert with the London School of Economics (LSE) warned that net contributors to Europe's budget - of which Ireland is one - will have to bridge the gap if Britain walks away without settling its bill to cover the cost of outstanding liabilities such as pensions.

And this could be "particularly toxic", Professor Iain Begg of the LSE's Europe Institute told the Brexit Select Committee.

Asked if he believed the €60bn bill mooted by the European Commission was reasonable, Prof Begg said: "Reasonable is a difficult expression. It's a credible number, because you can work out how they got there using the different components."

He said the UK could potentially be liable for contributions to the EU budget beyond the likely date for Brexit in 2019, and that there were outstanding pension contributions due as well as a legal obligation to pay for commitments agreed before that date, but which don't fall due until a later date.

"If you top them up, you can easily get to the €60bn," Prof Begg added.

European Commission President Jean-Claude Juncker has said the bill would be in the region of £50bn, or roughly €60bn, and that the final amount would be "calculated scientifically".

He insisted it was not a "punishment" for withdrawal, but merely the settling of commitments made by the UK.

The issue of the bill is likely to dominate the early stage of the talks process, due after the UK's snap election on June 8.

Although some Eurosceptics have questioned whether the UK should pay a bill at all, Prime Minister Theresa May has said that the country would meet its obligations. There is so far no agreement, however, on the final amount.

"If Britain withdraws its money from the EU budget, somebody else is going to have to pay in more, rather than expenditure being cut," warned Prof Begg.

"And that somebody else is inevitably going to be the net contributors, which is going to be particularly toxic. So that's one political consequence."

In 2013, Ireland became a net contributor to the EU Budget for the first time since it joined the bloc in 1973.

Irish Independent

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