There has been a lot of wailing and gnashing of teeth ever since Boris Johnson talked about withholding the £39 billion for this so called 'Brexit divorce' payment, hasn't there?
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Eurocrats, together with the French President Emmanuel Macron, are determined to get their hands on the £39 billion they say we owe the EU for having the temerity to leave the bloc.
And strangely they are joined by those on the Remain side in the UK who all want to see the UK (and themselves into the bargain) punished with a huge bill when we do leave.
But as I pointed out yesterday, there are those over here in the UK who say we don't owe a penny, starting with the House of Lords EU financial affairs sub committee. After all we never borrowed anything from the EU, did we?
Then there's Tory MP Charlie Elphicke and Martin Howe QC, who wrote an analysis on the UK's financial obligations to the EU and of the jurisdiction to enforce them and concluded that the UK does not owe any money as a 'Brexit divorce bill'.
And Jacob Rees-Mogg pointed out in a Tweet that:
"As we do not owe £39 billion not paying it cannot be a default, this French panic merely proves what a powerful negotiating tool it is."
But the EU is insistent that the UK owes what it has committed to until the end of the current Multiannual Financial Framework, or MFF, covering the years 2014 to 2020. Brussels claims that we owe it because we committed to the agreement as a sovereign nation.
So as far as I can see, the £39 billion figure is derived from the amount Brussels said would have been outstanding from the 29th March when we were due to leave until the end of 2020.
But as we have not yet left and are still paying into the current MFF, then surely this figure is diminishing by the day – because we are continually meeting that supposed obligation anyway?
But the Elphicke Howe analysis claims that the MFF derives from the treaties and if the treaties no longer apply when we leave then nor does the MFF – hence nothing owed.
And there's also the way that the international community would view this.
There are claims that not paying would be akin to defaulting on a sovereign debt, so the UK could be locked out of the international debt markets for years so leading to the UK credit rating being affected, so increasing the cost of servicing the UK national debt as well as devaluing sterling.
This would involve the big credit rating agencies downgrading the UK's rating based on the criteria they use for determining such things.
Now, according to a Reuters report the three rating agencies of Fitch, Moody's and Standard & Poor's all say that the UK would not technically be in default as withholding this money would not fall within their criteria.
But leaving the EU without a deal they say would almost certainly lead to a downgrade.
It's not the retaining of the money that would cause a downgrade. It is that retaining it would signal a no deal Brexit and that is what they say would lead to a downgrade, due to the potential repercussions of the EU refusing to forge a trade deal with the UK until it is paid as well as taking the UK to the courts in the Hague for a ruling.
But as I pointed out earlier, all the while we are within an Article 50 extension we are still in the EU and still paying into the Brussels coffers.
So that bill should be diminishing.
Now with 21 months between the and of March this year and the end of December 2020, that's £39 billion divided by 21 months or £1.85 billion a month.
And we're already over two months into that. So surely, if we did owe anything, we would only owe about £35 billion by now?
As we do not owe £39 billion not paying it cannot be a default, this French panic merely proves what a powerful negotiating tool it is.https://t.co/UvCSgjen7d
— Jacob Rees-Mogg (@Jacob_Rees_Mogg) June 10, 2019