Qfyilyi

It is expected that the U.K. will have to pay around £35 billion for its ongoing obligations if it leaves the EU with the currently proposed deal. I have heard both politicians and members of the public claim that in case of a No-Deal Brexit, no such payment would be required.

Is that correct? If it is not correct but the U.K. refused to pay, what would or could the EU do about it?

• According to Article 50, when a member state declares the intention to leave the EU they are out after two years unless a different agreement is negotiated. This article does not give any formula to calculate a lump sum for ongoing obligations, so there would be none unless everybody agrees.


• The remaining EU27 will have to pay for obligations which the EU28 entered. So in the case of a hard Brexit, the EU27 will be left holding the bag. They have no legal way to collect the money.

However, this would leave the UK outside the EU with no treaty. That will hurt the EU27, but it will hurt the UK more. The EU27 would enact only the rules they need to protect their citizens.

The EU27 could start to bargain. Landing rights for UK aircraft against landing rights for EU aircraft and a share of MEP pensions. Visa-free travel for UK citizens against visa-free travel for EU citizens and a share of the EDF bills. And so on.

Yes

While the current arrangement as part of the withdrawal deal is contingent on the UK/EU agreeing the whole of that deal, it is unlikely that the UK can complete Brexit with no payments made to the EU even under a no deal scenario.

This FT article suggests that the careful phrasing used by the PM Theresa May and the then Brexit Secretary Dominic Raab means that the UK will pay the EU the agreed liabilities, but will not do so on the schedule agreed during the Brexit negotiations.

What’s pretty much inconceivable is that the UK would use “no deal” to pay nothing to Brussels at all. Doubtless, the UK government could find lawyers to defend such a position in the event of no deal. But that would add one more nail to the coffin of the EU-UK relationship (on top, of course, of the economic catastrophe of no deal itself). It would set back even further the moment when the UK and EU could patch up the relationship. And paying nothing would do incalculable damage to the UK’s reputation as a reliable international partner.

During the negotiations the UK has accepted that it has significant liabilities in terms of monies owed to EU budgets. Using the lack of treaty enforcement to escape those payments would leave the UK with a reputation as a country that does not meet its obligations.