‘UK will leave a $23bn hole in EU budget in trade deal’

Bloomberg

The UK will leave a $23 billion hole in the European Union’s budget unless the bloc agrees to give Theresa May the sweeping Brexit trade deal she wants, according to senior British officials. Britain won’t fulfill May’s offer to cover the UK’s share of the EU budget through 2020 without a broader Brexit deal, said the officials, speaking on condition of anonymity. The UK also hasn’t accepted that it’s liable for a share of the pensions of EU staff, they said.
The comments from officials in May’s administration help clarify the premier’s intentions, which she laid out last month in a speech in Florence. In an attempt to unblock stalled talks, May said the UK would honor its financial obligations and keep paying into the EU budget. “I do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave,” she said. A spokesperson for the Brexit Department said the financial settlement should be “in accordance with law and in the spirit of the UK’s continuing partnership with the EU.”

Talks Unlocked
The thorniest element of the negotiations is the financial settlement, or how much money the UK will pay towards the EU’s ongoing liabilities when it quits the club of 28 countries in March 2019. Talks ended acrimoniously over the issue in August, but May seemed to have spurred progress with her speech
in Florence.
Even as she struggled to keep her divided Cabinet onside, May proposed a transition phase lasting around two years after Brexit day in 2019. In this period, aimed at helping businesses adjust, Britain would continue to pay its full share of the EU’s budget, she said.
Chancellor of the Exchequer Philip Hammond qualified May’s offer on the transition, during which the UK would pay into the EU budget. He said at the Conservative party conference in Manchester, England, that transition was a “wasting asset.”