Macron warns Boris Johnson over €44bn divorce bill from EU
Emmanuel Macron has warned Boris Johnson that Britain's economy will be downgraded and plunged into turmoil if the UK withholds the €44bn Brexit divorce payment from Brussels.
In his first interview of the Tory leadership campaign, Mr Johnson claimed he would "retain" the bill until he achieved a better EU deal.
He claimed withholding the money would be a "great lubricant" to persuade European nations to reopen talks on the backstop and the terms of a future trade deal.
However, a source close to Mr Macron, the French president, said failure to pay the divorce bill would be equal to a "sovereign debt default", such as that suffered by Argentina.
It would lead to a significant downgrade in the UK economy by ratings agencies, causing the value of government bonds to collapse, hitting savers and investors, including insurance companies and pension funds.
The source said: "Not honouring your payment obligations is a failure of international commitments equivalent to a sovereign debt default, whose consequences are well known."
There was similar concern about Mr Johnson's comments in Brussels, where senior figures warned that defaulting on Britain's divorce bill would be unacceptable.
Guy Verhofstadt, the European Parliament's chief Brexit negotiator, said: "This would not only hurt the UK's credibility as an international partner but it is absolutely unacceptable and contradicts what almost every lawyer in the UK thinks about it."
A significant part of the bill covers commitments to the existing EU budget, which runs to the end of 2020.
The remainder is made up of payments that Britain has signed off as a member state, such as EU pension liabilities.
Mr Johnson's position was backed up by fellow leadership candidate Esther McVey.
She said the €44bn was now "back on the table".
Meanwhile, another contender, Rory Stewart, has launched a furious broadside at Mr Johnson, accusing the former foreign secretary of not being honest about his Brexit plans and challenging him to rule out suspending parliament to force no deal through.
Mr Stewart said Mr Johnson was trying to "out-Farage Farage" with an undeliverable plan to renegotiate Theresa May's withdrawal agreement, designed to usher in no-deal Brexit but instead triggering a disastrous general election.
The verbal assault came ahead of the formal launch of the contest to replace Mrs May, with the official line-up of candidates to be confirmed today. (© Daily Telegraph, London)