UK Recognises Financial Obligations to EU

The U.K. acknowledged for the first time on paper that it will have to pay money to the European Union when it withdraws from the bloc, seeking to damp down a row over the country’s so-called Brexit bill.

“The government has been clear that we will work with the EU to determine a fair settlement of the U.K.’s rights and obligations as a departing member state,” Brexit Secretary David Davis said in a statement to Parliament that referred explicitly to the “financial settlement” with the EU. “The government recognizes that the U.K. has obligations to the EU, and the EU obligations to the U.K., that will survive the U.K.’s withdrawal — and that these need to be resolved.”

Britain’s so-called exit bill is one of the thorniest issues in the Brexit negotiations, with media speculation putting the fee as high as a gross 100 billion euros ($114 billion). Prime Minister Theresa May needs to come to an accommodation with her EU counterparts on the payment, because it’s one of three areas, alongside citizens’ rights and the border with Ireland that the EU is demanding “sufficient progress” on before the discussions can move onto Britain’s future relationship with the bloc.

Bloomberg

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.