The United Kingdom's so-called "divorce" or "exit" bill, referring to its outstanding financial commitment to the EU in light of Brexit, last year stood at €41.8 billion, according to the EU’s official auditors.
In 2021, the settlement was down from €47.5 billion in the previous year, mirroring the payments already made by the British government to cover obligations in line with the terms of the Withdrawal Agreement (WA) after it ceased to be an EU Member State on 31 January 2020 following its 47 years of membership.
"At balance sheet date, the EU accounts showed a net receivable due from the UK of €41.8 billion based on mutual obligations defined in the withdrawal agreement," the court of auditors’ annual report. The obligations refer to the UK’s participation in the EU budget and broader aspects of its EU membership before Brexit.
The report revealed that the UK was expected to make €10.9 billion in payments to the EU during 2022.
Different estimates
Previously, the EU's estimates of the Brexit financial settlement tended to be higher than what was forecast by the British government, which originally forecasted that the net cost to the UK range between £35 and £39 billion (€40-44 billion). However, in July 2022, HM Treasury's estimate increased to £42.5 billion (more than €48 billion).
Simon Clarke, who at the time was Chief Secretary to the Treasury, stated this was largely due to the latest valuation of the UK’s obligation under Article 142 for EU staff pensions. This aspect makes up the second largest component of the final settlement, according to the EU auditors.
However, while both parties agreed on a way to calculate the settlement, the final total has not been set in stoe, and depends on variables such as projects being cancelled and the development of EU loans.
Relations improved, but challenges remain
The publication of the report follows a slight improvement in EU-UK relations after a bumpy few months. In June and July 2022, the European Commission launched several infringement procedures against the UK for not complying with significant parts of the Protocol.
Current Prime Minister Liz Truss managed to smooth relations with European neighbours last week during the European summit in Prague that brought together EU and non-EU countries to discuss the war in Ukraine.
However, the EU-UK conflict over the Northern Ireland Protocol has not yet been resolved. Talks on the border issue were finally resumed after a standstill of more than six months.
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Whereas the UK wants to get rid of the arrangements agreed for the area as part of the Brexit agreements, the EU wants to stick to the rules, which require an open border between the Republic of Ireland and Northern Ireland and the monitoring of trade and traffic between Britain and Northern Ireland.
On Thursday and Friday, MEPs on the Trade Committee, which has closely followed the evolving trade relationship between the EU and the UK under the WA, will discuss ways to resolve the conflict with political representatives, businesses and civil societies in Belfast to hear the concerns of people that will be affected first-hand.
