Britain could be forced to pay the European Union a “divorce bill” of €20 billion (£18 billion) in the wake of the Brexit vote. The “upper estimate” to separate from the bloc would cover the UK’s shared EU liabilities including, unpaid debt of €241 billion (£217 billion), and €63.8 billion (£57.5 billion) in pension liabilities, according to new analysis conducted byThe Financial Times (FT). The study is the first attempt to put a realistic “price tag” on leaving the EU with some EU officials even warning that the cost could be substantially higher. Former UK Trade Minister Lord Livingstone said the cost spread over a year equates to £350 million a week. In the run-up to the June referendum, Vote Leave repeatedly claimed £350 million was sent to the EU each week. It also claimed this money could be used to increase NHS funding if Brexit was successful. However, just hours after the Brexit announcement, Ukip leader Nigel Farage said: “I can’t and I would never have made that claim – it was one of the mistakes that the Leave campaign made.”
Brexit: UK faces £350m-a-week 'divorce bill' as result of leaving the EU | The Independent
Wharton finance professor Joao Gomes thinks May is making “a grave mistake by rushing to the negotiation table.” For one, he expects the EU to take a tough stance on Brexit ahead of the French and German elections next year. The French presidential elections will be held in April and May 2017, while the German federal elections are set for between August and October 2017. “Afterwards, it is very likely that realism and a fair dose of euro-skepticism will creep into the views of those two key governments,” he says.
Can Brexit Be Achieved with Minimal Damage? - Knowledge@Wharton
If the U.K. opts to cut all its trade ties with the European Union and go for a "hard" Brexit, it could cost the government £66 billion ($81.1 billion) a year, according to a leaked government paper reported by The Times newspaper. U.K. government ministers have been warned that a "hard Brexit" – in which the U.K. leaves the EU's lucrative single market and instead reverts to World Trade Organization (WTO) rules – could prompt the U.K.'s gross domestic product (GDP) to fall dramatically, the newspaper said. "The Treasury estimates that U.K. GDP would be between 5.4 percent and 9.5 percent of GDP lower after 15 years if we left the EU with no successor arrangement, with a central estimate of 7.5 per cent," the leaked document noted.
'Hard Brexit' could cost UK government $81.1 billion a year: Report