Brexit: The Financial Settlement and the Withdrawal Agreement

Author: Anouk Berthier and Iain McIver

PDF Published: Monday 04 Sep 2017 (SB 17-60)

Expand
Overview
Report

Hide

Hide

Overview
Report
- Executive Summary
- Lexicon
- Context
- The negotiations so far
- The EU budget
  - Multi-annual Financial Frameworks and annual EU budgets
  - EU revenue: where does it come from?
  - EU expenditure: what is it spent on?
  - Multi-annual Financial Framework 2014-20
- Financial contributions between the UK and the EU
  - UK contribution to the EU budget
  - EU funding payments to the UK
  - Other costs to the UK associated with being in the EU
  - The UK's forecast contribution to the EU until 2021
- European Commission view on a financial settlement for UK withdrawal from the EU
  - Principles of financial settlement
  - Calculating the UK obligation in relation the EU budget
  - The UK's participation in specific funds and facilities
    
    Financial settlement in relation to European Investment Bank (EIB)
    
    Financial settlement in relation to the European Central Bank (ECB)
    
    Financial settlement in relation to European Development Fund (EDF)
    
    Financial settlement in relation to other EU bodies
- Estimates of the cost of leaving the EU
  - "Cancelling club membership" or "divorce"?
  - Financial Times study
- Scotland and the EU budget
- Annex 1: MFF 2014-2020 commitments including for the year 2017
- Annex 2: HM Treasury's assessment of UK contributions to the budget, 2010 to 2016
- Annex 3: Lists of bodies or funds included by the European Commission in the financial settlement
Sources

Image: Figure 1: EU revenue by category (€ billion) and UK share (%), 2016

Image: Figure 2: MFF 2014-2020 commitments, € billion

Image: Figure 3: UK contribution to the EU, 2011 to 2016, € billion*

European Commission. (2017). The UK 'rebate' on the EU budget An explanation of the abatement and other correction mechanisms. Retrieved from http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/577973/EPRS_BRI(2016)577973_EN.pdf [accessed 17 August 2017]

European Commission. (2017). Speech by Michel Barnier, the European Commission's Chief Negotiator, following the first round of Article 50 negotiations with the UK. Retrieved from http://europa.eu/rapid/press-release_SPEECH-17-1704_en.htm [accessed 17 August 2017]

EU Commission. (2017). Position paper "Essential Principles on Financial Settlement". Retrieved from https://ec.europa.eu/commission/sites/beta-political/files/essential-principles-financial_settlement_en_2.pdf [accessed 4 August 2017]

UK Government. (2017, February 2). The United Kingdom’s exit from and new partnership with the European Union. Retrieved from https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/589191/The_United_Kingdoms_exit_from_and_partnership_with_the_EU_Web.pdf#page=50 [accessed 27 August 2017]

UK Government Department for Exiting the European Union. (2017, August 30). David Davis' closing remarks at the end of the third round of EU exit negotiations in Brussels. Retrieved from https://www.gov.uk/government/news/david-davis-closing-remarks-at-the-end-of-the-third-round-of-eu-exit-negotiations-in-brussels [accessed 1 September 2017]

The Guardian. (2017, August 30). UK tells Brussels negotiators their Brexit bill sums do not add up. Retrieved from https://www.theguardian.com/politics/2017/aug/30/uk-tells-brussels-negotiators-their-brexit-bill-sums-do-not-add-up?CMP=Share_iOSApp_Other [accessed 1 September 2017]

European Commission. (2017, August 31). Speech by Michel Barnier at the press conference following the third round of Article 50 negotiations with the United Kingdom. Retrieved from http://europa.eu/rapid/press-release_SPEECH-17-3043_en.htm [accessed 1 September 2017]

House of Lords European Union Committee. (2017, March 4). European Union Committee Brexit and the EU budget. Retrieved from https://publications.parliament.uk/pa/ld201617/ldselect/ldeucom/125/12502.htm [accessed 1 September 2017]

Scottish Parliament. (2014). The European Union Multiannual Financial Framework and European Funding Programmes 2014-2020. SPICe briefing 14/61. Retrieved from http://www.parliament.scot/ResearchBriefingsAndFactsheets/S4/SB_14-61.pdf [accessed 10 August 2017]

Darvas, Z., Efastathiou, K., & Raposo, I.G. (n.d.) Divorce settlement or leaving the club? A breakdown of the Brexit bill. Working Paper. Issue 3. Retrieved from http://bruegel.org/wp-content/uploads/2017/03/WP_2017_03-.pdf

National Audit Office. (2016). Briefing on EU-UK finances. December 2016. Retrieved from https://www.nao.org.uk/wp-content/uploads/2016/12/Briefing-on-EU-UK-finances-2.pdf [accessed 2 August 2017]

European Commission. (2017). Consolidated annual accounts of the European Union and Financial Statement Discussion and Analysis - Financial year 2016. Retrieved from http://ec.europa.eu/budget/library/biblio/publications/2017/EU_Annual_Accounts_2016_en.pdf [accessed 2 August 2017]

UK Government. (2017). HM Treasury. European Union Finances 2016: statement on the 2016 EU Budget and measures to counter fraud and financial mismanagement. February 2017. Retrieved from https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/590489/PU2027_EU_finance_2016_final_WEB.pdf

Office for Budget Responsibility. (2017). March 2017 Forecast. Retrieved from http://budgetresponsibility.org.uk/efo/economic-fiscal-outlook-march-2017/ [accessed 8 August 2017]

European Commission. (2017). Mid-term review/revision of the Multiannual financial framework 2014-2020. Retrieved from http://ec.europa.eu/budget/mff/index_en.cfm [accessed 1 September 2017]

Keep, M. (2017, January 30). A guide to the EU budget. Retrieved from http://researchbriefings.files.parliament.uk/documents/SN06455/SN06455.pdf [accessed 9 August 2017]

Keep, M. (2017). The UK's contribution to the EU Budget. House of COmmons Library. Retrieved from http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7886 [accessed 8 August 2017]

European Commission. (2017). Speech by Michel Barnier at the press conference on the adoption of the Commission's recommendation on draft negotiating directives. Retrieved from http://europa.eu/rapid/press-release_SPEECH-17-1205_en.htm [accessed 8 August 2017]

European Commission. (2014). System of own resources. Retrieved from http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM:l34007 [accessed 17 August 2017]

Financial Times. (n.d.) Brexit number crunch: the final bill the EU could accept. 16 June 2017. Retrieved from https://www.ft.com/content/69296fe6-51be-11e7-a1f2-db19572361bb [accessed 10 August 2017]

European Investment Bank. (n.d.) EIB - At a glance. Retrieved from http://www.eib.org/about/index.htm [accessed 28 August 2017]

European Investment Fund. (2017). Who we are. Retrieved from http://www.eif.org/who_we_are/index.htm [accessed 1 September 2017]

European Investment Bank. (2017). EIB - At a glance. Retrieved from http://www.eib.org/about/index.htm [accessed 30 August 2017]

European Investment Bank. (2017). EIB - Shareholders. Retrieved from http://www.eib.org/about/governance-and-structure/shareholders/index.htm?f=search&media=search [accessed 30 August 2017]

European Investment Bank. (2016). 2016 Financial Report. Retrieved from http://www.eib.org/attachments/general/reports/fr2016en.pdf [accessed 3 August 2017]

Financial Times. (2017). Brussels hoists gross Brexit ‘bill’ to €100bn. 3 May 2017. Retrieved from https://www.ft.com/content/cc7eed42-2f49-11e7-9555-23ef563ecf9a [accessed 10 August 2017]

Scottish Parliament. (2017). The Brexit negotiations: Issues for the first phase. Retrieved from http://www.europarl.europa.eu/RegData/etudes/IDAN/2017/607267/EPRS_IDA(2017)607267_EN.pdf [accessed 16 August 2017]

European Commission. (n.d.) European Development Fund. Retrieved from https://ec.europa.eu/europeaid/funding/funding-instruments-programming/funding-instruments/european-development-fund_en [accessed 28 August 2017]

European Commission. (2017). Annual Accounts of the European Development Fund 2016. Retrieved from http://ec.europa.eu/budget/library/biblio/documents/FED/FED_2016_en.pdf [accessed 4 August 2017]

European Development Fund. (2017). Annual Accounts of the European Development Fund 2016. Retrieved from http://ec.europa.eu/budget/library/biblio/documents/FED/FED_2016_en.pdf [accessed 4 August 2017]

European Parliament. (2017). Possible impacts of Brexit on EU Development and humanitarian policies. Retrieved from http://www.europarl.europa.eu/RegData/etudes/STUD/2017/578042/EXPO_STU(2017)578042_EN.pdf [accessed 31 August 2017]

European Commission. (2017). Trust Fund 'Bêkou'. Retrieved from https://ec.europa.eu/europeaid/trust-fund-bekou_en [accessed 2017]

UK Parliament. (2017). The Turkey Refugee Facility:Written statement - HCWS582. Retrieved from https://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2016-03-07/HCWS582/ [accessed 4 August 2017]

McIver, I., & Wakefield, S. (2016). European Union Funding in Scotland 2014-2020. SPICe briefing 16/89. Retrieved from http://www.parliament.scot/ResearchBriefingsAndFactsheets/S5/SB_16-89_European_Union_Funding_in_Scotland_2014-2020.pdf [accessed 10 August 2017]

UK Government. (2017). Public Expenditure Statistical Analyses 2017. Retrieved from https://www.gov.uk/government/statistics/public-expenditure-statistical-analyses-2017 [accessed 16 August 2017]

Last Updated: 23/4 9:56am

Image: Figure 1: EU revenue by category (€ billion) and UK share (%), 2016

Image: Figure 2: MFF 2014-2020 commitments, € billion

Image: Figure 3: UK contribution to the EU, 2011 to 2016, € billion*

An error occured while loading, please try again in a few minutes.