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Brexit Series: EU increases exit bill demand to €100 billion

The European Union reportedly increased the opening demand of the Brexit bill, which is demanded by the European Union to be paid upfront before exit negotiations begin, from the current €60 billion to €100 billion over stricter demands from Germany and France. After last week’s disastrous dinner between the European Commission President Jean-Claude Juncker, chief negotiator Michael Barnier and the UK Prime Minister Theresa May, it seems that the European Union has taken a stricter stance towards Brexit. Following requests from several member states including France and Germany, the EU negotiators have revised their initial bill in order to maximize the liability that Britain is being asked to cover. The bill includes post-Brexit farm payments and the EU administration fees.

In response to the initial bill, the United Kingdom has retaliated by describing themselves as equity holders in the European project and calling for a share of the European assets. France and Poland have pushed for the inclusion of post-Brexit annual farm payments and Germany is against granting the UK any share of the European assets. Michel Barnier, the EU’s chief negotiator, has said no figure will be set until the end of the Brexit process and payments could be staggered. But he wants Britain to agree on a methodology before trade talks can begin, including a definition of EU liabilities the UK would be expected to share. He will unveil a draft negotiating mandate on Wednesday.

The reputed newspaper Financial Times have calculated the approximate liabilities that the UK is being asked to cover at somewhere between €91 billion to €113 billion, which in net terms comes somewhere between €55 billion and €75 billion. A reputed think tank Bruegel has estimated the cost at somewhere between €82 billion and €109 billion and the net at somewhere between €42 billion to €65 billion. However, during recent private deliberations, France and Poland insisted that EU liabilities worth €183 billion, covering annual farm subsidies and administrative costs, should also be added to the tally. Greece asked that the UK also honor political commitments it made to fund refugee programs in Turkey.

This demand of a huge upfront payment by the EU remains one of the biggest hindrances to a smooth exit for the UK.

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