Jean-Claude Juncker labelled a ‘poundshop Bismarck’ over Brexit divorce bill demands

30th August 2017 Newsroom Europe 0

European commission president Jean-Claude Juncker / Photo via Daily Mail

The Telegraph — Jean-Claude Juncker has been labelled a “poundshop Bismarck” after he criticised Britain’s Brexit negotiating position and demanded the UK commit to paying a divorce bill.

The president of the European Commission warned there will be no discussions on a new trade deal between the EU and UK until progress is made on the so-called Brexit bill and other key issues.  

Jacob Rees-Mogg, a leading Tory Brexiteer, said Mr Juncker was trying to “extort” money from the UK as he compared him unfavourably to Otto von Bismarck, the 19th Century leader who is widely viewed as the architect of a united Germany.

Mr Rees-Mogg said “Mr Juncker’s effort to extort money from us shows he is an amateur even at blackmail.”

He added: “Mr Juncker is a pound shop Bismarck, arrogant and bullying but without the charm.”

Mr Juncker told EU ambassadors in a speech on Tuesday that he did not believe any of Britain’s Brexit negotiating papers were “satisfactory”.

Meanwhile, he said that there remained an “enormous amount of issues that need to be settled”.

He warned that there would be no discussions on the UK and EU’s future trading arrangements until sufficient progress has been made on the Brexit bill, the Irish border and and citizens’ rights.

 “We need to be crystal clear that we will commence no negotiations on the new economic and trade relationship between the UK and the EU before all these questions are resolved,” he said.

Mr Juncker said there was a need to “settle the past before we look forward to the future”.

His comments highlighted the apparent size of the gap between the UK and the EU as the latest round of negotiations continue in Brussels this week with the Brexit bill having emerged as a key sticking point.

Michel Barnier, the EU’s chief Brexit negotiator, used a joint press conference with David Davis, the Brexit Secretary, on Monday to criticise Britain for its “ambiguity” on the issue.

The Government has not formally commented on the potential size of any bill it could be willing to pay and wants the EU to spell out the legal basis on which it is basing its calculations.

What is the Brexit “divorce bill”?

The European Union expects the UK to make a financial settlement on exiting the EU. The full balance of this has yet to be negotiated, but it will be calculated based on the following:

  1. The ongoing EU budget. The current EU budgetary period began in 2014 and continues until 2020 – a year after the UK is expected to withdraw. EU negotiators argue that the UK government voted on and agreed to contribute funding to, for example, long-term infrastructure projects until 2020. The UK government would rather these funding commitments ended in 2019.
  2. Liabilities for loans. The UK backed European Union development lending to other member states, for example Ireland, the Ukraine and Portugal. The EU wants us to make funds available to cover the chance of these loans defaulting. This money would eventually be repaid as each of the loans cleared.
  3. Pension promises. The UK would be expected to cover the pension contributions of EU officials employed during its membership period.
  4. Other expenses. For example, two European Union agencies are currently based in the UK. The European Banking Authority and the European Medicines Agency will need to relocate after Brexit.

Balancing this bill will be:

  • The UK’s usual rebate from EU contributions
  • A discount of whatever planned EU spending was supposed to be allocated to the UK
  • A share of assets, such as capital from the European Central Bank or the value of European Union buildings built during our membership