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The German government is encouraging Britain to agree a mathematical formula for calculating its European divorce settlement rather than settling on a precise figure in an attempt to avoid a looming clash that risks derailing Brexit talks.
The chancellor, Angela Merkel, put the EU on a potential collision course with Theresa May on Thursday by insisting it made “no sense” to negotiate a future UK-EU relationship without first reaching agreement on the UK’s financial commitment to the EU.
Angela Merkel attacks British 'illusion' of keeping benefits of EU
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In her first big Brexit speech since May triggered article 50, Merkel told the German parliament that British politicians were still living under an “illusion” that the UK would retain most of its rights and privileges once it left the EU.
“Countries with a third country status – and that’s what Great Britain will be – cannot and will not have the same or even more rights as a member of the European Union,” she said. “You may think that all this is self-evident. But I have to put this so clearly because I get the impression that some in Great Britain still have illusions about this and that is a waste of time.”
There are mounting fears that the intransigent position of European leaders is encouraging the hardliners in Britain who are threatening to walk away with no deal. Britain’s CBI, German carmakers and the Irish government all sounded the alarm on Thursday at the dire prospects for UK-EU trade if there was no agreement.
Privately, officials in Berlin are looking for creative solutions to the problem, which might avoid the prime minister being forced to write a politically unpalatable €60bn (?51bn) cheque before she even gets to start negotiating future trade relations.
German government sources suggest that a “constructive solution” mentioned in Merkel’s blunt statement could take the form of the UK agreeing to a formula by which Britain’s future contributions in specific areas, such as pensions, EU budget, growth funds, would be calculated – thus avoiding coming up with concrete sums.
The idea was met with a mixture of bemusement and scepticism in London, where the Tory government remains determined to try to negotiate its future trade relationship at the same time as separation talks. Eurosceptic critics in the media are likely to calculate an implied cost of Brexit whether or not politicians are willing to acknowledge it publicly.
UK government sources pointed to earlier speeches by Merkel where she suggested there was merit in parallel talks. They suggested that the looming German election could be responsible for a hardening of language, which they hoped would be temporary. German taxpayers are likely to end up footing the largest bill for filling any EU budget shortfall after Brexit, leading to domestic pressure not to be seen to let Britain off the hook.
In the UK parliament, David Jones, the Brexit minister, told MPs that the government was willing to leave the EU with no deal if necessary.
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