Sunday 25 February 2018

Cost of Brexit to EU budget a 'black hole', says bloc's auditors

Klaus-Heiner Lehne elected President of the European Court of Auditors
Klaus-Heiner Lehne elected President of the European Court of Auditors

Sarah Collins in Brussels

European Union auditors say they have no way of knowing what the costs of Brexit will be for the bloc's budget, or what the UK will owe on exit.

"It's a black hole," said the president of the European Court of Auditors, Klaus-Heiner Lehne, adding that the EU and UK positions now are "so far away" from each other that a divorce settlement might not even be completed within two years, the legal time limit set in the EU treaty. The UK has indicated that it will trigger an EU exit before March 2017.

Press reports this week estimate the UK will owe the EU between €20bn and €40bn on leaving the bloc, taking into account the country's remaining EU budget commitments, pension liabilities for EU staff and contingent liabilities such as losses on loans and guarantees.

British contributions post-Brexit will depend on whether the country chooses to pay to retain access to the EU's single market, though the UK government has said it will not pay close to current levels.

Once the UK leaves the EU, the bloc will have to decide whether to reduce payments to farmers, students, poorer regions and for overseas development aid, or make up the shortfall by asking for more money from the remaining 27 EU members.

UK contributions made up 16pc of the EU's €145bn budget last year, the second-highest contribution, behind Germany (at 20pc). Ireland's contributions made up 1.3pc.

Ireland also owes an extra €280m to the EU budget - on top of the €1.8bn it paid in last year - as a result of the massive revision to 2015 GDP figures.

"Brexit will naturally have significant implications for the revenues of the European Union, and its assets and liabilities," said Kevin Cardiff, Ireland's member of the Court of Auditors.

The Brexit bill won't hit until early 2019, two years after the UK has indicated it intends to trigger divorce proceedings. Until then the UK will have to continue paying into the EU budget as normal.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business