Brexit Q&A: Will Britain have to pay €100bn to leave EU?

Has the EU in increased the bill for the British to leave the European Union?

It hasn’t. At least, not yet. But officials are working on methodologies for calculating the British bill which will form an important part of the first phase of the negotiations. Last week, EU leaders agreed that the exit settlement would have to see substantial progress before the talks progressed towards any future relationship - such as a trade deal - with the UK.

How much will the bill be?

That’s not clear. EU leaders met at the weekend but did not discuss any figure - rather, they agreed that a process to compute the bill should be agreed with the British side at the beginning of the negotiations.

The previous working estimate form the Commission had been that the EU's figure would be in the region of €40- €60 billion. However, an analysis by the Financial Times suggests the gross calculation of Britain's exit liabilities could be as much as €100 billion, though that would be reduced over a period of years as Britain received its share of EU spending programmes. The Breugel think-tank estimates an upfront bill of €82-€109 billion, reducing over a period of years.

This morning, Michel Barnier, the EU's chief Brexit negotiator, said the bill was not calculated but would not be punitive - merely a "settling of the accounts".

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What has the British response been?

Predictable. Brexit secretary David Davis insisted that there was no question of the UK paying €100 billion to leave the EU. However, Mr Davis said that Britain would meet its international obligations.

Why does the UK have to pay a bill in the first place?

The EU’s budget is decided on a multi-annual basis, with member states undertaking to pay into budget over several years. On the basis of those undertakings, the EU then enters into spending commitments, in structural funds, development programmes, common agricultural policy payments and so on.

The EU view is that the UK is legally bound to honour its commitments. But this means that the UK could still be paying for, say, structural funds in favour of other EU Member States up to 2023.

The other big part of the Brexit bill will be the pension bill for EU civil servants - which includes British nationals working or who have worked in the EU institutions. The EU position is that the UK must pay its share of this bill, though what the exact bill is has yet to be worked out.

Will the UK pay up?

Britain has accepted that there may be some liabilities outstanding, but won’t accept anything like a €100 billion figure. Agreeing a process which can come to an agreed figure will be one of the first tasks of the Brexit talks, but concluding an agreement on that is far from certain. Mr Davis has pointed out that once Britain leaves the EU in two years’ time, it will no longer be subject to the jurisdiction of the European Court of Justice, and therefore couldn’t be forced to pay.

So what happens if the British refuse to pay anything?

That would signal a complete breakdown in the negotiations, and mean that an agreement on Brexit is unlikely. In a meeting with the British prime minister Theresa May last week - details of which have been leaked - president of the European Commission Jean Claude Juncker is said to have told the British that if they refuse to pay the bill, there will be no trade deal post-Brexit. That would be a disaster for Ireland, meaning high tariffs for many Irish goods entering the UK market