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The 60 billion divorce bill

29 Mar 2017

Now that the UK signed and delivered the letter on Article 50, let me look at the first reaction from Brussels in the last weeks (March 2017): It's a divorce bill of 60 billion Euro. In my view this is an insult, but let's not be surprised, the standard thinking of a EU fanatic.

 

I like details, so let's look at it in detail, as there are 3 main blocs of payment requests:

 1 - contributions to the pension pot (~8bn)

The funny thing is, the EU is so arrogant, that there is no pension fund for future pension payments. So far, pensions payments could be paid by more and more contributors  y member states, nothing was saved. It is a kind a ponzi scheme, always more in, bit less out. A ponzi scheme works well so long nobody wants out, but if somebody leaves, the scheme collapses, as it does now with BREXIT.

Is this UKs problem? I think not, as long as the UK accepts to pay the fair share of pension claims from the UK delegates working for the EU. But that is it, Brussel can choose to continue its Ponzi scheme, or not, but the UK’s will not bail them out anymore.

2 - promised project contributions (~43 bn)

The way the EU works is with long-term promises. A very political approach, as long as you promise to like me, I promise you whatever you want.

So what Brussels bureaucrats do day in day out is to create a long list of To-Dos, and, as every accountant does, adds a projected cost number to it. It goes from infrastructure, unemployment avoidance, regional development and fishery, you name it.

But this does not mean that all of the projects actually started, that a single stone was moved, it is not even guaranteed they will start in the next 7 years. Its just a To-Do list, and what's on this list, stays on this list. Member states have only to pay once the project started, everything else are political promises made by EU …, not sure how I should call these people anymore, they are running very elaborate Con schemes.

Is this UKs problem? I think not, as long as the UK contributes their share to projects that actually started, that's it. Future "dreams" will not be funded by BREXIT.

3 - Credit guarantees (9bn)

As long as the sun is shining, the EU countries like Spain, Italy… well all of them, pay back their credits, or I should say: get more Euros to pay back their debt. But if they fail, as some honestly should do, the guarantees must be paid by the surviving countries. 

Is this UKs problem? I think not, the UK guarantee is alive until they leave the EU, then its EU problem to find a replacement insurance.

4 - What does the EU owe the UK (-11bn only?)

Over the years, the EU build up assets, from owning buildings, land and financial. The EU claims that they just own (disposable) assets for 23bn, the UK sees the total, disposable or not, more near 154bn. Its the typical divorce question: who gets the children?

Is this UKs problem? I think not, the UK wants no children, it wants the fair cash value, may want to keep - and pay - for some assets of the EU located in the UK, or not, but then the UK’s out of the den. Example: over 10% of all EU parliamentary buildings in Brussel and Strasburg are "owned by the UK. The EU can choose to buy this share in cash, or pay an annual rent.

At the end, either a reasonable divorce settlement will emerge, or the split will be painful for the EU. But let's not forget, this divorce bill will be a blue print for all other 27 countries with EXIT ideas, and be is tempting for some. And this the EU is trying to avoid at all costs, by overcharging the UK.

 

(Note: originally written in March 2017, edited in August 2019)

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Axel R Thill

© 2017 by IamSixZero

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