What will be the Brexit bill?

Britain’s exit from the European Union will be like many divorces: there will be a bitter argument about money. According to the Financial Times, Britain will have to pay €20bn (£18bn) to leave the EU, taking into account the UK’s share of the EU’s unpaid bills and pension liabilities. The German magazine Wirtschaftswoche suggested in August that the Brexit bill could be as high as €25bn.

Some officials in Brussels think both these estimates are on the low side, although they do not offer alternative figures. The budget is one of the main areas Michel Barnier, the European commission’s chief Brexit negotiator, is focusing on, in addition to trade and the single market. But his team have yet to produce their own estimate of how much Britain should pay.



How long will it take to find out?

Negotiations on the budget will not begin until Theresa May invokes article 50, the EU exit clause. The prime minister has promised to notify the EU of Britain’s intention to leave by the end of March 2017. Her announcement will start the clock on two years of negotiations. As money is so fundamental, it is likely the final bill will not be settled until the end.

What are the issues?

The article 50 talks will be about unwinding EU membership: the EU will press Britain to pay its share of unpaid bills and liabilities; the UK is expected to seek a share of EU assets.

The EU’s unpaid bills totalled €218bn in 2015. These are IOUs that have paid for motorways, bridges and other economic development projects in poorer regions of Europe. Unpaid bills have mounted up over the last 15 years, as the EU has gone on a spending spree, following the enlargement to central and eastern Europe.

Another problem will be agreeing the UK’s share of the EU’s €59bn pension liability, which guarantees income for 1,730 retired British officials. EU sources say the UK will be on the hook for its share of all pension liabilities, not only those of British officials.

The headquarters of the European commission in Brussels. Photograph: Getty Images

Will the UK be paying into the EU budget after leaving?

In theory the UK could be required to pay into the EU budget until 2022 or 2023, because of the time lag between authorising payments and paying the bill.

But sorting out the divorce is only part of the Brexit negotiations. Britain will have to pay into the EU budget if it wants good access to the single market.

Reimer Böge, a German Christian Democrat MEP who used to chair the European parliament’s budgets committee, said countries wishing to participate in the single market would need to pay into the common pot. Without such payments, British students and British universities would be barred from EU programmes and funding.

“Germany, the Netherlands, Sweden and other net payers can never accept that they pay the bill for the internal market and Great Britain has access to the market without paying anything,” he told the Guardian. “There will be an ongoing bill, year by year, to be a member of the internal market.”

He thought it was “a bit premature” to be talking about numbers, because “the story is very complicated”.

Although the final bill is not known, one thing is clear: EU leaders will want to show there is a price for leaving the EU, while the UK will try its hardest to minimise it. With such large sums at stake, there is plenty of negotiating to do.