Following months of deadlock in Brexit negotiations, Prime Minister May is preparing to make a goodwill gesture to get talks moving again. May plans to offer the EU an initial sum of €20billion (around £17billion) in her much-anticipated Florence speech, according to the Financial Times.
The money will mean other EU member states won’t have to pay more to fill the financial hole left when Britain leaves. EU officials estimate that post-Brexit, there’ll be a black hole of €20billion in the EU budget – which runs up to 2020 – when British contributions stop. The prime minister’s offer will largely fill that gap and ease a lot of pressure placed on Germany and France to carry the burden by increasing contributions.
Downing Street are hopeful that the offer will result in an agreement to allow negotiations to move on to trade talks – the sooner they start, the less likely Britain is to crash out – and get Angela Merkel onside, who the prime minister hopes will be an ally as negotiations move into the next phase.
Cabinet ministers, including Boris Johnson, will be briefed on the matter in a special cabinet meeting on Thursday, ahead of the prime minister’s speech in Florence, Italy, on Friday. Despite firing a warning shot at the prime minister through a 4,000 article in the Telegraph, Foreign Secretary Johnson is now thought to be on-side and is not expected to resign anytime soon.
While £17billion may be a lot for Brits to stomach, it will not be the final financial settlement the UK pays to the EU. Britain still has to cover the cost of long-term liabilities and other obligations, in line with the letter, and spirit, of the law. The final bill may well be greater than £40billion, according to some estimates.
EU leaders will meet in October to decide whether enough “sufficient progress” has been made to allow trade talks to begin. Though they are still unlikely to give the green light due to the last three months of deadlock over financial settlements, this gesture by the British government will increase the chances and certainly brings some goodwill to the table.