EU leaders have ramped up Brexit tensions ahead of a crucial summit tomorrow, dismissing Theresa May’s offer to pay 20billion euros into Brussels coffers as ‘peanuts’.
The president of the European parliament, Antonio Tajani, accused Theresa May of being ‘unrealistic’ and said the divorce bill should be around 60billion euros.
But furious Brexiteers complained that the EU was ‘stalling’ negotiations in a bid to force Britain into handing over billions of pounds with ‘nothing in return’.
The bitter standoff over money is threatening to derail the talks over the UK’s departure from the bloc.
The president of the European parliament, Antonio Tajani, accused Theresa May of being ‘unrealistic’ and said the divorce bill should be around 60billion euros
It has emerged as the key issue in the first phase, with the EU refusing to discuss trade until the outline of the financial settlement is agreed.
Brussels’ chief negotiator Michel Barnier has sought to up the pressure by repeatedly pointing out that the ‘clock is ticking’ before the formal Brexit date in March 2019.
Mrs May will head to the Belgian capital tomorrow for a summit where she will seek to push the case for trade talks to begin immediately.
But a major diplomatic offensive, which has seen the PM ring round almost all her counterparts over the past week and dine with European commission president Jean-Claude Juncker, has so far failed to secure a breakthrough.
Speaking on the BBC’s Newsnight, Mr Tajani took a hard line and quoted former PM Margaret Thatcher saying ‘we need our money back’.
‘We are realistic. The UK government is not realistic. I think we need to be very clear. We need to put the money on the table. We need our money back, as Mrs Thatcher said 30, 40 years ago,’ he said.
‘This is important for us. But we want not euro more and not euro less. This is very clear for us. But we need to pay, this is the third point, then it is possible to start for the negotiations for the new deal.’
Challenged that the EU was holding up talks to force money out of the UK, Mr Tajani replied: ‘€20bn is peanuts, it’s peanuts €20bn…The problem is 50, 60, this is the real situation.’
Mr Tajani lashed out at infighting on the British side, claiming that the EU was not clear ‘what the UK wants to do’.
Mrs May dined in Brussels with EU commission president Jean-Claude Juncker on Tuesday as she tried to find a way of unblocking the Brexit negotiations
Brexit Secretary David Davis told MPs yesterday that the talks were reaching the ‘limits of what can be achieved’ without discussing trade
‘This is the problem. It is not very clear because there are a lot of problems inside the European Union. We are united. I don’t know if there is a unity, where is the unity in the United Kingdom? Because there are many different positions. We have only one position, only one negotiator,’ he said.
‘In the Conservative Party, there are different position. This is not good for a good work in the next month. We ask, please, we need a Conservative decision on this. Which is the line to take between the three different position. For us it’s important know.’
HOW THE EU HAS PUMPED UP THE BREXIT DIVORCE BILL
EU states have been piling on demands as they realise the scale of the hole about to be left in the bloc’s finances by the departure of its second biggest contributor.
The key elements of the divorce demand from Brussels include:
- The UK should keep paying into EU coffers until 2021 – after we formally leave – because that is when budgets have been set until.
- Farm subsidy payments and EU administration fees for 2019 and 2020.
- Britain should fund agreed loans that have already been agreed to poorer EU states.
- Paying for relocation of EU agencies to other states after Brexit.
- UK to be denied a share of the bloc’s assets, such as buildings, which could have brought the sum down.
- Other costs include around 10billion euros towards funding generous pensions for thousands of Eurocrats.
Ireland’s PM Leo Varadkar has also complained that the EU was still unsure what the UK hoped to achieve in a Brexit deal.
But former Cabinet minister Iain Duncan Smith said Brussels was using bullying tactics to pursue its ‘agenda’.
‘The EU has decided to drag its feet in the negotiations and refuse to discuss anything other than its own agenda,’ he wrote on the Brexit Central website.
‘That EU agenda is, of course, all about money — as much as they can get out of the UK in return for engaging on post-Brexit trade arrangements.
‘All that nonsense about ‘sufficient progress’ is of course a crude smokescreen to disguise a naked attempt to force us into a major financial commitment with nothing in return. That is why the talks have stalled.’
In a sign of the economic risk caused by the uncertainty in the Brexit process, a senior City figure warned that firms would have no choice but to move jobs to other European Union countries in order to ensure they can keep trading unless progress was made.
London Stock Exchange chief Xavier Rolet said that regulatory systems that will change as a result of Brexit ‘cannot be replicated overnight’ so businesses will simply make their own arrangements and move to the EU if they are not given sufficient notice.
‘Businesses cannot risk a cliff-edge being so near before they start accelerating the migration of functions away from the UK to ensure they can participate in the global market,’ he wrote in the Daily Telegraph.
But Mr Rolet also warned European leaders that protectionist moves to strip London of its role in euro clearing could trigger another global financial meltdown.
OECD chief Angel Gurria, pictured yesterday, compared the challenges of Brexit to the Blitz, which saw bombs from Hitler’s forces rain down on London during the Second World War
Taking back euro trading into the Eurozone would ‘increase systemic financial risk’ because ‘the global monitoring of risk would be impaired and that risk more heavily concentrated’.
He said: ‘To those who want to dismantle rather than build on a system of global regulatory standards that protects taxpayers and reduces the cost of capital, we say: do not willingly diminish systemically important global financial market infrastructure just to make a political point.’
THE STICKING POINT IN BREXIT TALKS
The first phase of Brexit negotiations appear to be boiling down to money – with the EU seeking to extract the maximum possible from the UK.
Michel Barnier made clear last week that there was a ‘disturbing’ deadlock on the scale of a divorce bill.
The EU wants the UK to give a broad commitment to meeting all liabilities – including elements such as pension for Eurocrats – for years after we leave.
The PM has refused to go that far, despite floating a £20billion contribution during a transition and offering a limited promise on liabilities.
On citizens’ rights, Mr Barnier has insisted the UK must accept that EU courts will enforce the rights of EU nationals in Britain after Brexit.
Mrs May has said she cannot accept the ECJ being solely responsible, but there have been signs a compromise with joint jurisdiction could be in the offing.
Diplomats now believe the main issues have been resolved, and a deal could be struck. But the EU is thought to be holding back to provide cover for its financial demands.
Brexit Secretary David Davis told MPs last night that a deal was close on securing the rights of 3.2million EU citizens in the UK and 1.2million Britons living in Europe.
But he said that Brussels was refusing to discuss trade relations in an attempt to secure a bigger divorce payment.
He said: ‘The simple truth is that we are in a negotiation and they are using time pressure to see whether they can get more money out of us – that is what is going on, as is obvious to anybody.
‘That will take some time, but I am sure we will get there in time to get a decent outcome for everybody.’
Downing Street yesterday confirmed it would not set out the total it was willing to pay until talks with the EU on trade had concluded.
MPs tore into a Paris-based think-tank yesterday for suggesting Brexit should be reversed to save the British economy – branding it the return of ‘Project Fear’.
The Organisation for Economic Co-operation and Development (OECD) said quitting the EU in a disorderly way could cripple the UK economy.
And it said holding a fresh referendum to stay in the bloc would be ‘positive’ for UK business.
Speaking at the launch of the bleak report in London, OECD secretary general, Angel Gurria, compared Brexit to the Blitz.
But a string of MPs slammed the assessment saying it was yet another example of Brexit gloom from an organisation hellbent on talking down Britain’s economy.
A Government spokesman said: ‘We are leaving the EU and there will not be a second referendum.’