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EU to UK: All Your Money Are Belong To Us

Walter Russell Mead

A cool €100 billion is the new estimated Brexit tax that the EU may ask Britain to pay, according to the Financial Times:

Although over coming decades Britain’s net bill would be lower than the €100bn upfront settlement, the more stringent approach to Britain’s outstanding obligations significantly increases the estimated €60bn charge mentioned by Jean-Claude Juncker, the European Commission president.

It also reflects the steadily hardening position of many EU member states, which have abandoned early reservations about the bill’s political risks to pile on demands that will help to plug a Brexit-related hole in the bloc’s common budget. […]

The hefty bill represents one of the biggest early obstacles to a smooth Brexit. To the alarm of the EU side, Theresa May bluntly rejected the notion of an exit bill at a recent dinner with Mr Juncker, saying any financial terms would be tied to securing a trade deal by 2019. On Tuesday, she promised to be a “bloody difficult woman” in talks.

These are going to be some interesting negotiations. From a U.S. point of view there are three things to think about: we don’t want a negotiating process so bitter that it further weakens the western alliance system; we want the future UK-EU trading relationship to be as open as possible, because it is in our interest that both the EU and the UK prosper. And we don’t want the UK to split up.

The U.S. has a lot at stake in these negotiations. With both the NSC and the State Department still staffing up, we must hope that some wise heads in Foggy Bottom and 1600 Penn are working out the basics of an American approach.

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