Eu Withdrawal Agreement Financial Settlement

The terms of financial equalization are the same as in the withdrawal agreement negotiated by Theresa May`s government and in the most recent version. The comparison defines the financial commitments to be covered, the method of calculating the UK`s share and the payment plan. Since the UK did not leave the EU on 29 March 2019, the UK continued to contribute to EU membership. Article 50 has been extended to 31 October 2019 and the UK`s contributions for the period from 30 March to 31 October 2019 have amounted to $5 billion, so it is estimated that $32.8 billion (36.3 billion euros) still needs to be settled as of October 31, 2019. [33] Article 50 was adopted until 31, despite additional contributions until January 2020 and favourable currency fluctuations which reduced the amount payable in pounds sterling, the estimate of financial liquidation increased to $32.9 billion as of January 31, 2020, when the UK left the EU [3] Initially, the comparison was estimated at about $39 billion. , but much of it has been paid as the UK`s regular contribution to the EU budget in 2020. In the financial settlement (comparison), the UK and the EU indicated how they would rebalance their remaining financial commitments. These commitments stem from the UK`s participation in the EU budget and the wider aspects of its membership of the EU. The UK`s commitment must be set as a percentage of the EU commitments calculated at the time of withdrawal according to a methodology agreed during the first phase of the negotiations. [2] The amount to be calculated is complex and includes, in addition to the EU`s core budget, various liabilities.

The UK is also entitled to a portion of the EU`s assets. [1] After the approval of the withdrawal agreement, the United Kingdom left the EU on 31 January 2020 to enter a transitional period, while continuing to contribute to the EU as if it were a member. [4] The transition period is due to end on December 31, 2020 and, on the basis of payments scheduled until December 31, 2020, the outstanding liquid balances (LRA) on that date will be increased by other financial liabilities. [4] The European Union Act (withdrawal agreement) 2019-20 authorizes the Ministry of Finance to make payments planned until March 2021. [4] After December 2020, payments will be made twice a year. [3] There is no final cost for the comparison. The final cost to the UK will depend on future events such as future exchange rates and EU budgets. The Office for Budget Responsibility estimates the net cost to the UK at $33 billion. In September 2018, when he was Brexit minister, Dominic Raab said the UK would not pay financial equalization to the EU in a non-deal scenario. [32] In March 2018, the Office for Budget Responsibility (OBR) published the UK`s economic and budget outlook, including details of the financial settlement estimated as of 29 March 2019, when the UK was due to leave the EU, which was estimated at 37.1 billion pounds (41.4 billion euros). [31] [26] The estimated count consisted of: everything in the subdivision does not fit well into these three components.

For example, the UK has agreed to continue to contribute to the EU`s main aid programme abroad, the European Development Fund, until the end of the current programme. This programme is funded directly by the Member States and not by the EU budget. The UK`s contribution is attributed to its commitment to spend 0.7% of national income on foreign aid. This triggered Article 50 of the Treaty on the European Union, which defines the procedure for the withdrawal of an EU member state, thus opening a two-year countdown to withdrawal.