EU 'would probably' take legal action if divorce bill isn't paid, warns economist

Wednesday, October 17, 2018

The EU would probably take Britain to the international court if it doesn’t pay its divorce bill, according to an economic expert.

It follows reports that Chancellor Phillip Hammond warned cabinet ministers the UK could still have to pay the EU up to £36 billion of the £39 billion divorce bill, even in the event of a no-deal Brexit.

The £36 billion would settle any outstanding liabilities the UK has to the EU.

Talking to Matthew Wright on talkRADIO, Vicky Pryce, an economist from the Center of Economics and Business Research, said that Britain has “entered into a legal commitment” so would face action from the EU if it refuses to pay the divorce bill.

“Once you’ve entered into a legal commitment which is exactly what we did - Britain is known for honouring its commitments – you have to commit.

“In other words, there are all sorts of things the EU has started doing where we have pledged that we will be paying our share.

“We’ve paid a certain amount already and the programme will continue for quite some time, these include paying the pensions for people who work in the EU and in the commission - some of them our own people.”

 

'EU would probably take the UK to the international court'

When asked by the talkRADIO host what would happen in the event of the UK leaving with a no-deal and not paying the divorce bill, Ms Pryce said the EU would probably seek legal action.

“The EU would probably take us to the international court in the Hague,” she said.

“I think eventually we would win, but of course we might not pay this back for quite some time, but it is not going to be particularly good for the UK's relationship with anyone.

"If we’re going to be entering new agreements with other countries, who is going to trust us when we do that?”

The money the UK pays the EU goes into facilities used throughout the bloc; including space programmes, regeneration projects and infrastructure rebuilding. According to Ms Pryce, in some areas the UK gets back more than it puts in.

“Remember net is about £8 billion a year we pay, which isn’t huge and in some areas like science, for example, we get more back than we put in,” she said.

“We’ve already made a pledge to the farmers that we will continue for quite some time to support them and subsidise them. So, we won’t be saving an awful lot at all. 

"If the economy grows more slowly it makes it harder to meet some of the obligations that would have been met otherwise through the help of the EU.”