WHAT the EUROPEAN UNION OWES the UNITED KINGDOM Officials to Taunt the UK Or Reposition It As a Kind of Payment of a So-Called ‘Brexit Divorce Bill’

P O L I Global Britain Programme C Y

WHAT THE EUROPEAN R I UNION OWES THE E F I

UNITED KINGDOM N

James Rogers and Jack Wright G December 2017 2017/1

making concessions. I would say we [Britain and the EU] Introduction are far from having reached the necessary financial commitments before we can open phase two [in The United Kingdom (UK) has come under intense fire the negotiations]. We are not halfway there” . 3 Likewise, on both sides of the Channel over the past year for its German Chancellor Angela Merkel has propelled a decision to leave the European Union (EU). Perhaps the similar narrative: “This is about obligations that Great most contentious issue to date has been the so-called Britain has entered into and that naturally must remain ‘divorce bill’, which the country agreed to pay in the Joint on the books. It’s not about the cost of divorce – that Report , issued by the UK and EU on 8 December 2017. 1 makes it sound like fines” .4 Equally, European Commission Certain EU politicians and officials argue that the degree Lead ‘Brexit’ Negotiator Michel Barnier claimed: to which London honours its longstanding financial commitments will greatly determine whether the EU will You can’t have twenty-seven paying for what was agree to a new form of commercial relationship. The EU decided by twenty-eight, so what was decided by quickly established a sequencing procedure, which the twenty-eight member states – that has to be borne UK subsequently – if ill-advisedly – accepted. Its out by twenty-eight member states right up to the objective was to force the British government to accept end. It’s as simple as that. I’ve been very disappointed EU terms before moving on to discuss a new by the UK position, because it seems to me [to be] arrangement. This should not be a surprise: Britain is a backtracking on the original commitment of the UK major net contributor to the EU budget; the loss of to honour its international commitments, including British financial input will be keenly felt once the UK the commitments post-Brexit .5 leaves the bloc. Compounded by ongoing political volatility in London and misconstrued statements by This Policy Briefing does not take issue with these some British ministers, it is entirely unsurprising that EU assertions: earlier British governments bound the country politicians are suspicious of whether or not the British to honour the legal and moral responsibilities of EU will pay, particularly if negotiations are derailed. 2 membership; any decision to renege on these would only Consequently, the EU’s language and behaviour has been validate the concerns of the Europeans. Instead, it will at times strident and forceful: EU leaders have made it demonstrate that Britain, far from bowing down to EU clear that Britain must acquiesce to their demands before demands, is actively behaving as a responsible, albeit any new trade relationship is reached. temporary, EU member. For example, after British Prime Minister Theresa May At the same time, this Policy Briefing will argue that the offered £20 billion as a settlement in her Florence speech British government would do well to push back against on 22 September 2017, French President Emmanuel the emergence of a more malevolent undertone, Macron dismissed the sum outright: “It’s not about reflected in the attempts of some EU politicians and Page 2 WHAT THE EUROPEAN UNION OWES THE UNITED KINGDOM officials to taunt the UK or reposition it as a kind of payment of a so-called ‘Brexit divorce bill’. Yet a false pariah state. The European Parliament’s lead negotiator accusation is emerging wherein London buckled under on UK withdrawal, Guy Verhofstadt MEP, is a case in the pressures of an impending deadline, capitulated to point: whereas Mrs May sought to allay the concerns of European demands, and so betrayed core UK national the Europeans in her Florence speech, Mr Verhofstadt interests .9 All manner of British politicians have entered responded, to scornful and derisive laughter, by asserting the foray: former leader of the UK Independence Party that: “She [Mrs May] chose Florence because Florentine (UKIP) Nigel Farage told Reuters the deal signalled the politics in the 15th century made her feel at home I betrayal of British national interests: “The British prime think – backstabbing, betrayal, noble families fighting for minister needs to say [to the EU]: ‘Look, either start to power and so on. So, I think it is an environment that behave reasonably, either start to behave in a grown-up she recognised very well” . 6 More seriously, on a later way, or … we are walking away [from concluding a trade occasion, Mr Barnier accused Britain of reneging on its deal]’” .10 Priti Patel, resigning from her Cabinet position commitments to European security, notably in the fight earlier this year, similarly informed the audience of a against Islamist extremism: Spectator -hosted event that Britain “should have had conviction and clarity in terms of our end state and It [Brexit] was a decision that came after a series of destination and presented that and been pretty forthright attacks on European soil, committed by young about it as well”. “My views on money are pretty clear,” people who grew up in Europe, in our countries. It she added, “I don’t like spending money so I would have was a decision that came six months after the French told the EU to sod off with their excessive financial minister of defence [Jean-Yves Le Drian] issued a demands” .11 call for solidarity to all his European counterparts to join forces to fight the terrorism of Daesh [i.e., Prominent politicians in favour of remaining within the Islamic State]. Never has the need to be together, to EU have also criticised the conduct of government protect ourselves together, to act together been so diplomacy. Labour MP Chuka Umunna targeted specific strong, so manifest. Yet rather than stay shoulder to shoulder Leave campaigners – now appointed Cabinet officials – with the union, the British chose to be on their own again. 7 who omitted substantive discussion on the terms of [Emphasis added] payment upon withdrawal: “Boris [Johnson], [Michael] Gove and other Leave campaigners never said there As this Policy Briefing will show, such resentment is would be a big divorce bill to pay – quite the opposite”. largely without foundation. Mrs May has repeatedly Sir Vince Cable stated: “If these numbers are correct, it made this clear: “The UK may be leaving the EU means we’re paying a heavy price to leave an institution but we are not leaving Europe, and we are that has benefited the country for decades” . 12 And the unconditionally committed to maintaining Europe’s Scottish National Party (SNP) announced: “Despite security” . 8 Consequently, the British departure cannot trumpeting the rhetoric of taking back control, this latest be used to justify the allegations and smears in relation episode over one of the key issues show this is a to Britain’s supposed unreliability. On the contrary, this government that has completely lost all control of its Policy Briefing will emphasise that the UK continues to obsessive hard Brexit bandwagon” .13 underpin the geopolitics of continental security, just as it has done for at least the last 70 years, if not the past Such verbal jousting is wholly irrelevant and inaccurate. 500. Finally, it will question whether or not the time has The ‘divorce bill’ is only an agreement-in-principle : one now come for mainland European countries to honour wherein both negotiating parties have conceded the need for a method by which to reliably calculate what costs their own commitments to European security, given that 14 Britain and its North American allies continue to play a should be included in the final bill . The EU stipulations contrast sharply with UK interests, however, over the degree disproportionate role in underpinning the wider to which Britain honours its outstanding membership Euro-Atlantic order, on which the EU depends. commitments. Whereas the EU has argued the UK should be theoretically expected to contribute 1. The ‘Brexit Bill’: approximately €30 billion (£27 billion at current prices) alone to its outstanding commitments, London insists the What the United UK will only contribute in accordance with its prior seven-year budgetary commitments and thereby ensure Kingdom Owes the no member state is impoverished by British withdrawal. This sum might total €20 billion (£18 billion), to be paid European Union incrementally until a mutually agreed date. Doubtless to say, the UK will need to honour long-term commitments To settle its outstanding EU financial commitments, and like pensions contributions and contingent liabilities (i.e., move talks on toward a future commercial relationship loans that are guaranteed to Ireland and Ukraine, repaid with the bloc, London has now concluded negotiations to Britain); but since these could each potentially total with its European interlocutors committing Britain to the another €10 billion (£9 billion) and €11.5 billion (£10 WHAT THE EUROPEAN UNION OWES THE UNITED KINGDOM Page 3 billion) respectively, the UK has expressed an interest in Merkel articulated the idea most fervently during the calculating its pension liabilities .15 And Brussels has alleged German general election in 2017 when she declared: that London would need to commit more than €20 billion “Strengthening Europe means strengthening Germany. (£18 billion) in future investment projects amongst the The greatest security, the greatest peace project for us, is the European less-developed European member states – despite such Union ” [Emphasis added] . 22 So far, UK officials and works only due to begin after the UK has left the EU .16 politicians have failed to expand the context of the negotiations, to draw in alternative and connected matters, Britain, in other words, maintains enduring legal not least those pertaining to European security. requirements to pay into the seven-year budgetary cycle that concludes in 2020. This bill is not an additional Aside from the way in which it traps the UK and prevents expense heaped upon the British taxpayer; rather, the UK it from playing some of its strongest cards, the ‘peace government has always agreed to honour the bill. As narrative’ is highly problematic. Undoubtedly, EU explained by Mrs May, on the day the British government integration helped mainland Europeans to move beyond triggered Article 50: their ancient feuds, but insofar as both the European Coal and Steel Community (ECSC) and later the European Of course we have to look at the rights and obligations Community (EC) involved only a small number of we have as a member of the EU. While we continue countries until the end of the Cold War, the EU can to be a member until we leave we will carry on paying hardly be held responsible for European peace. Moreover, according to the obligations we have as a member .17 the ‘institutionalisation’ of the power of the Atlantic Her speech in Florence reiterated this stance: democracies – Britain and the United States (US) – upon a largely defanged continent, stupefied by the trauma of ...I do not want our partners to fear that they will two consecutive world wars, has been largely overlooked. need to pay more or receive less over the remainder By enlarging the context, it is possible to develop a more of the current budget plan as a result of our decision sophisticated appraisal of the way in which European to leave. The UK will honour commitments we have 18 peace has taken root, as well as the unique role the UK made during the period of our membership . has played a special role in acting as its midwife .23 Thus, it would be mendacious to suggest the costs of This order can be better understood if relayed through withdrawal – inherent to both the UK’s continued the analogy of the ‘tenant’ and the ‘landlord’: membership and unwavering aspiration to uphold international law – necessitate any reconsideration of the The UK played and plays a unique role in the system. decision to leave the EU . 19 Equally, given that Britain It is not in any meaningful sense ‘equal’ to the other has already offered to settle its accounts amicably, it is states of the ‘club’ that it is leaving … because the EU absurd to argue the EU has the UK ‘over a barrel’ on depends entirely on Nato [sic.], of which Britain is this issue . 20 These responsibilities transcend the petty the dominant European member, for its security. squabbling of multifarious politicians; to renege on them Accordingly: so early in the negotiations would almost certainly give legitimate credence to illusory European accusations of The EU may be a club and it can make whatever rules British pariahood. it likes, but it should never forget that the Anglo-Americans own the freehold of the property on which the club is built. Brussels and the continental 2. Comparing the capitals are at best leaseholders, and in many cases just tenants of this order. Put another way, the UK is not British and European just another European ‘space’ to be ordered, but one Commitments to of the principal ordering powers of the continent .24 European Security To some extent, Mr Juncker has even alluded to Britain’s special role as a kind of European landlord, not least when he declared that London could not use the EU officials and politicians have sought to maintain the contributions it has made to European peace in the past focus of the withdrawal negotiations exclusively on to make claims either against its final payment, or on a UK-EU relations, insofar as this strengthens their hand and future EU-UK arrangement. As he put it before the compounds Britain’s isolation. Most pressingly, they have European Council in October: “I’m not in a revenge been keen to overlook the British role in relation mood; I’m not hating the British. The Europeans have to be to European defence and security since even before the UK 21 grateful for so many things Britain has brought to Europe before population voted on the future of their EU membership . war; during war; after war, everywhere and everytime , but now Here, they have been assisted by the growth of what might they have to pay” [Emphasis added] .25 be described as the ‘peace narrative’, which equates European security and prosperity directly with the project But Britain’s role has not subsided. As indicated by the of European integration. Indeed, Chancellor Angela Secretary of State for Exiting the EU David Davis, Page 4 WHAT THE EUROPEAN UNION OWES THE UNITED KINGDOM the UK still matches its commitments to European Germany, with all its wealth and prosperity – and a vast security with a substantial military capacity .26 Indeed, the trade surplus – has shortchanged European security by a strategic role countries like the UK continue to play in whopping US$142 billion. This means it has fallen short underpinning European security can be readily of its NATO spending target by 39%. Italy, a large and quantified by analysing European military spending, wealthy country of 60 million people, has shortchanged important because it provides the means for countries to European security by almost US$90 billion, or 43%. procure armaments to protect themselves and their allies. Another large NATO member, Spain, has shortchanged So, logically, the larger the military budget, the more European security by US$75 billion, which means it has significant the country is likely to consider its regional or failed to meet NATO’s target by a massive 54%. And the global obligations, especially if it feels that it is not under Netherlands, somewhat smaller, but nevertheless wealthy, threat of direct attack. Here, British and American has shortchanged European security by US$64 billion, or defence spending contrasts sharply with most European almost 42%. The failure of large and wealthy NATO and countries, almost all of which have routinely shirked their EU countries on the European mainland to meet their military obligations for several decades and show – with commitments is thrown into astonishing contrast to the few exceptions – little sign of improvement. less affluent countries of Eastern Europe (i.e., Poland and the Baltic states) which have managed to boost their Given the stagnation of mainland European military defence spending as a percentage of GDP. expenditure during the mid-2000s, all North Atlantic Treaty Organisation (NATO) members agreed, albeit As NATO’s Secretary-General remarked last year, once non-bindingly, at a Meeting of Defence Ministers in the the UK leaves the EU, over 80% of NATO defence run-up to NATO’s Riga Summit in 2006, to gradually spending will come from outside mainland Europe, even increase their defence spending to 2% of their GDP . 27 though continental European countries are the most However, those mainland European members of both threatened, either from Russia to the east, or a NATO and the EU failed to uphold their commitment: combination of instability and extremism to the south. 31 by 2014, NATO’s official defence spending statistics Over the past five year period, British defence spending – reveal that the same countries were collectively spending at US$285.5 billion – accounts for 32% of spending by just 1.23% of their GDP on defence . 28 Thus, with the NATO and EU members, a figure that hides its true effect, Russian annexation of Crimea in 2014, and subsequent not least because many European countries’ armed forces invasion of Eastern Ukraine, along with a push from are unable to fight at the highest intensities, even in London and Washington, NATO formally committed self-defence. Worse, excluding the UK, the only states itself during the Newport Summit to enhancing military belonging both to NATO and the EU that consistently expenditure to 2% of GDP within ten years .29 This would (2012-2016) spend more than 2% of their GDP on mandate an increase of just under 0.08% of GDP per defence (i.e., Greece) account for just 13% of the alliance’s year until 2024 to reach the target. Yet, since then, most total European surplus, meaning that the UK contributes mainland NATO/EU countries have failed to keep up 87%. This means that Britain has effectively subsidised with their targets: in 2015 they only spent 1.28% of GDP the security and defence of the European mainland by an on defence, instead of 1.31%; in 2016 they only spent extra US$23.9 billion from 2012-2016. Moreover, in 1.32% instead of 1.38%; and in 2017, they will likely terms of the concrete commitments in support of NATO’s spend only 1.42%, rather than 1.48%. As such, if their Enhanced Forward Presence, in the form of troops, actual military spending is calculated in relation to what armour and artillery, three of the four ‘framework nations’ they should be spending, i.e., 2% of GDP, it is possible to – the UK, the US, and Canada – will come from outside show by how much they are still shortchanging NATO, mainland Europe, while only the British and Americans and, consequently, European security. To invoke the US will provide the alliance with an explicit nuclear guarantee, President Donald Trump, this is what they might be seen insofar as France asserts nuclear autonomy and does not to “owe” those countries – particularly the UK and the partake in NATO’s Nuclear Planning Group .32 US – that are already meeting their obligations . 30 Here, as shown by Table 1 (overleaf), the countries that are both A country’s strategic commitment may also be quantified mainland European members of NATO and the EU by looking at the size of its Official Development continued to shortchange the alliance – and therefore Assistance (ODA), otherwise known as foreign aid . ODA is their own security – by over US$96 billion in 2016, and important because it – if deployed effectively – can a shocking US$451 billion over the past five-year period prevent threats from arising at source, by generating more (2012-2016). resilient, prosperous and integrated societies in regions adjacent to NATO and the EU. Unfortunately, for The largest and richest European countries are the mainland Europeans, their spending looks little better leading miscreants. France, ostensibly the alliance’s third than their defence outlay. This is even more surprising strongest military power, has shortchanged NATO, and given that most European countries have long committed thus European security, by some US$24 billion over the in principle to spend at least 0.7% of their GDP on ODA, past five years, meaning it has missed the alliance’s a target established in the 1970s and to which the EU spending target by 9%. Over the same timeframe, committed in 2005 .33 Some EU countries, insofar as they WHAT THE EUROPEAN UNION OWES THE UNITED KINGDOM Page 5 realise they are shortchanging NATO, argue their aid and ODA spending is from Britain’s final payment to the spending would help them make up for the shortfall .34 In EU. Such accusations belie reality, tantamount to almost all cases, though, it would not: according to the nothing more than political deflection: The EU is not Organisation for Economic Co-operation and only connected to NATO, but completely dependent on Development (OECD), in 2016, almost all EU countries, the alliance; European integration is largely a product of with the exception of Sweden (0.94%), Denmark (0.75%) peace and security, not its cause. While the EU has helped and Luxembourg (1.0%), as well as the UK and to dampen distrust between ancient opponents, Europe Germany, which spend 0.696% and 0.698% respectively, is peaceful and prosperous today primarily because the spend less than 0.7% of their GDP on ODA .35 UK and the US have been willing to finance sophisticated armed forces and nuclear forces to deter Consequently, as shown by Table 2 (overleaf), if the EU countries – both within and without NATO, and by countries’ (excluding the UK) actual ODA spending is extension the EU – from disrupting the status quo. calculated in relation to the 0.7% target, it is possible to Whatever role the EU has played has been at best ascertain that they have shortchanged the world’s poorest supplemental. people by over US$199 billion – US$39.8 billion per year – over the past five year period (2012-2016). Whilst To be clear, this Policy Briefing does not mean to imply Britain also shortchanged the world’s poor, by US$3.25 in any way that the final British payment to the EU billion, over the same timeframe, the majority of this should be offset by European taxpayers, insofar as the underspend occurred before the UK committed, UK’s contribution to European security can be through an Act of Parliament, to spending 0.7% of its quantified in both tangible and intangible terms. The national income on ODA per year. However, it should fact that the UK has met NATO’s defence spending goal be noted that Britain allocated on average 0.67% of its every year since 2006, as well as committing to spend GDP on ODA during this five-year period, while the rest significantly more than the EU average on the provision of the EU allotted less than half as much. of ODA, speaks for itself. British political and military support for NATO, particularly in relation to the Again, as with defence spending, the largest and richest Enhanced Forward Presence, also stands out. So, far EU countries are the principal culprits. Although from being a force for disintegration and destruction, as Germany reached the target of 0.7% of its GDP on ODA its opponents argue, Britain is still a resolute guardian of in 2016, it has averaged at only 0.48% over the 2012-2016 the European order. Meanwhile, an argument could be timeframe, shortchanging the world’s poorest people by put that as they have shortchanged NATO and the US$36.4 billion. France, with the second largest mainland world’s poorest people by hundreds of billions over the European economy, and with its interests and colonial past five years, the Europeans – particularly the largest inheritance in Africa and parts of Asia, spent only 0.4% countries, Germany, Italy, Spain and France – have of its GDP on ODA from 2012-2016, meaning it undermined the security of their own continent, and by shortchanged the world’s poor by US$36.9 billion. Italy, extension the integrity of the EU. the third largest mainland European economy, spent a lousy 0.19% of its GDP on ODA during the same period, Ultimately, given the UK’s enduring commitment to meaning it shortchanged the world’s poor by a whopping European security, this Policy Briefing asserts that the EU US$45.2 billion. Spain, the fourth largest mainland still owes the UK due regard and goodwill. As Britain is European economy, and with a colonial history in South unlikely to shirk its commitments to the EU, albeit in America, spent an equally lousy 0.18% of its GDP on keeping with the principle, as laid down by the European ODA between 2012-2016, meaning it shortchanged the Council’s negotiating guidelines, that “nothing is agreed 36 world’s poor by US$30.2 billion. Even Belgium and the until everything is agreed”, it is time to focus on the Netherlands, two of the world’s richest countries, and with future. Whilst many Europeans may still feel shunned colonial inheritances in Southern Africa and the East that the British decided to leave their union and chart a new destiny, they are not entitled to behave as if the UK Indies respectively, also managed to shortchange the 37 world’s poor, by US$5.9 billion between them. is a pariah state . Encased by a volatile strategic environment, the EU will almost certainly need British military support in the future, in the form of the Conclusion: What the country’s unique strategic military assets. So rather than descend into mutual acrimony, the EU and the UK must European Union Owes resist exchanging snipes, and instead work harder to the United Kingdom establish a new and durable relationship.

Those who pressurise Britain from the European mainland appear to have overlooked their own failures. James Rogers is Director of the Global Britain Programme They will likely respond by claiming that NATO and the at The Henry Jackson Society. Jack Wright is Senior EU are as separate from one another as their defence Research Assistant for the same programme. Page 6 WHAT THE EUROPEAN UNION OWES THE UNITED KINGDOM

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11 Quoted in: ‘I would have told the EU to sod off over Brexit NOTES: divorce bill, Priti Patel says’, The Telegraph , 27 November 2017, available at: http://www.telegraph.co.uk/news/ 2017/11/27/would-have-told-eu-sod-brexit-divorce-bill- 1 See: ‘Joint report from the negotiators of the European Union priti-patel-says/, last visited: 8 December 2017. and the United Kingdom Government on progress during phase 1 of negotiations under Article 50 TEU on the United 12 Both quoted in: Heffer, G., ‘PM accused of selling out over Kingdom’s orderly withdrawal from the European Union’, £50bn Brexit bill’, Sky News , 29 November 2017, available at: European Commission , 8 December 2017, available at: https://news.sky.com/story/britains-brexit-bill-likely-to-be- https://ec.europa.eu/commission/sites/beta-political/ up-to-50bn-11148113, last visited: 8 December 2017. files/joint_report.pdf, last visited: 8 December 2017. 13 Quoted in: Gourtsoyannis, P., ‘SNP criticises UK 2 For example, the Foreign Secretary, Boris Johnson, stated in Government’s Brexit “divorce bill shambles”’, The Scotsman , the House of Commons that the EU could “go whistle” if it 6 August 2017, available at: https://www.scotsman.com/ made excessive financial demands on the UK. However, this news/politics/general-election/snp-criticises-uk- did not mean – as Mr. Johnson later pointed out – that he was government-s-brexit-divorce-bill-shambles-1-4523916, stating that the UK should not pay anything. Rather, he was last visited: 8 December 2017. asserting that it should pay only if the fee is reasonable and in 14 See: Foster, P., ‘Exclusive: Britain and the EU agree Brexit keeping with Britain’s own expectations. See: ‘Boris Johnson divorce bill’, The Telegraph , 28 November 2017, available explains “EU can go whistle” remark’, BBC News , 7 December at: http://www.telegraph.co.uk/news/2017/11/28/ 2017, available at: http://www.bbc.co.uk/news/ exclusive-britain-eu-agree-brexit-divorce-bill/, uk-politics-42261967, last visited: 8 December 2017. last visited: 8 December 2017. 3 See: Boffey, D., Mason, R. and Rankin, J., ‘Emmanuel 15 The British government has claimed it should be entitled to Macron accuses Brexiters of bluffing over no-deal divorce’, its proportion of EU assets if it is to share responsibility for The Guardian , 20 October 2017, available at: EU commitments after it eventually leaves the bloc; the https://www.theguardian.com/politics/2017/oct/20/ predominant voices within the European community say that brexiters-trying-to-bluff-no-deal-scenario-emmanuel-macron, assets belong to the entire EU, and not individual states. See: last visited: 8 December 2017. ‘The EU divorce bill’, Institute for Government , 7 September 2017, 4 See: Maxwell, F., ‘UK must pay Brexit bill, says Angela available at: https://www.instituteforgovernment.org.uk/ Merkel’, Politico.eu , 26 August 2017, available at: explainers/eu-divorce-bill, last visited: 8 December 2017. https://www.politico.eu/article/angela-merkel-uk-brexit- See also: Stone, J. and Watts, J., ‘Brexit: Britain set to agree bill-obligation/, last visited: 8 December 2017. divorce bill with EU that could cost up to £45bn’, The Independent , 29 November 2017, available at: 5 See: Stone, J., ‘Britain is “backtracking” on its Brexit divorce http://www.independent.co.uk/news/uk/politics/brexit- bill commitments, EU’s chief negotiator warns’, The divorce-bill-deal-cost-latest-uk-eu-agree-terms-michel- Independent , 8 September 2017, available at: barnier-a8081141.html, last visited: 8 December 2017. http://www.independent.co.uk/news/uk/politics/brexit-eu- 16 divorce-bill-payment-michel-barnier-david-davis-backtracking See: Morris, C., ‘Brexit divorce bill: Reality Check asks -brussels-a7934296.html, last visited: 8 December 2017. what’s happening’, BBC News , 17 November 2017, available at: http://www.bbc.co.uk/news/uk-politics-42025865, 6 Quoted from: Morrison, S., ‘Brexit is a “waste of time and last visited: 8 December 2017. energy”, Guy Verhofstadt tells London students’, Evening 17 Standard , 28 September 2017, available at: Quoted in: The Editorial Staff, ‘Transcript: Andrew Neil’s https://www.standard.co.uk/news/politics/brexit-is-a-waste- Brexit interview with Theresa May’, The Spectator , 29 March of-time-and-energy-guy-verhofstadt-tells-london-students- 2017, available at: https://blogs.spectator.co.uk/2017/03/ a3646366.html, last visited: 8 December 2017. transcript-andrew-neils-brexit-interview-theresa-may/, last visited: 8 December 2017. 7 Quoted from: Stewart, H., ‘Michel Barnier raises UK hackles 18 Quoted in: ‘PM’s Florence speech: a new era of cooperation with speech about Isis and Brexit’, The Guardian , 29 November and partnership between the UK and the EU’, Gov.uk , 22 2017, available at: https://www.theguardian.com/politics/ September 2017, available at: https://www.gov.uk/government/ 2017/nov/29/michel-barnier-raises-uk-hackles-with-speech- speeches/pms-florence-speech-a-new-era-of-cooperation- about-isis-and-brexit, last visited: 8 December 2017. and-partnership-between-the-uk-and-the-eu, last visited: 8 See: Quoted from: Banks, M., ‘UK Prime Minister May: “We 8 December 2017. may be leaving the EU but we are not leaving Europe”’, 19 “38% of the electorate are changing our national destiny on Defense News , 27 November 2017, available at: the basis of a referendum campaign that is now widely https://www.defensenews.com/global/europe/2017/11/27/ regarded as dishonest, and that called for us to leave the uk-prime-minister-may-we-may-be-leaving-the-eu-but-we- European Union without beginning to address the question of are-not-leaving-europe/, last visited: 8 December 2017. what we do next. In foreign policy terms, it’s a bit like invading 9 For ongoing commentary, see: Goodenough, T., ‘What the Iraq without any plan for the day after Saddam Hussein has papers say: How to convince Brits the Brexit divorce bill is fallen. Look where that landed us – and the people of Iraq”. worth it’, The Spectator , 29 November 2017, available at: Quoted in: Westmacott, P., ‘Project Fear has become Brexit https://blogs.spectator.co.uk/2017/11/what-the-papers- cold reality. It is time to vote again’, The Guardian , 1 December say-how-to-convince-brits-the-brexit-divorce-bill-is-worth-it/, 2017, available at: https://www.theguardian.com/ last visited: 8 December 2017. commentisfree/2017/dec/01/project-fear-brexit-cold-reality- 10 Quoted in: Faulconbridge, G. and MacAskill, A., ‘Brexit vote-again-second-referendum, last visited: 8 December 2017. campaigners accuse May of selling UK short over divorce 20 See: Roberts, D., ‘Brexit talks: for all Britain’s bluster, the EU bill’, Reuters , 29 November 2017, available at: has it over a barrel’, The Guardian , 28 November 2017, https://www.reuters.com/article/uk-britain-eu-brexiteers/ available at: https://www.theguardian.com/politics/ brexit-campaigners-accuse-may-of-selling-uk-short-over- 2017/nov/28/brexit-talks-for-all-britains-bluster-the-eu- divorce-bill-idUSKBN1DT1Q5, last visited: 8 December 2017. has-it-over-a-barrel, last visited: 8 December 2017. WHAT THE EUROPEAN UNION OWES THE UNITED KINGDOM Page 9

21 European Commission President Jean-Claude Juncker: Briefing by NATO Spokesman, James Appathurai, after the “When I addressed the European Parliament back in June meeting of the North Atlantic Council at the level of 2014, I was telling the Parliamentarians that amongst the ten Defence Ministers’, North Atlantic Treaty Organisation , priorities of my Commission, defence would be dealt with in a 30 October 2006, available at: https://www.nato.int/docu/ very privileged way. Nobody – or more or less nobody – did speech/2006/s060608m.htm, last visited: 8 December 2017. believe it at the time when I was saying this. That gives me the 28 See: ‘Information on defence expenditures’, North Atlantic opportunity to say that all those who are writing that the Treaty Organisation , 29 June 2017, available at: proposals of the Commission – the recent ones – are a direct https://www.nato.int/cps/ic/natohq/topics_49198.htm, last consequence of the election of Mr Trump as U.S. President visited: 8 December 2017. All subsequent military spending or a consequence of Brexit are totally wrong, because this is data used in this Policy Briefing comes from this source. an ongoing process since June 2014”. Quoted from: ‘Remarks 29 See: ‘Wales Summit Declaration’, North Atlantic Treaty by President Juncker at the joint press conference with Organisation , 5 September 2014, available at: Bohuslav Sobotka, Prime Minister of the Czech Republic, https://www.nato.int/cps/ic/natohq/official_texts_ and Rose Gottemoeller, NATO Deputy Secretary-General’, 112964.htm, last visited: 8 December 2017. European Commission, Press Release Database, 9 June 2017, available at: http://europa.eu/rapid/press-release_ 30 As the US President put it: “Germany owes vast sums of SPEECH-17-1589_en.htm, last visited: 8 December 2017. money to NATO and the United States must be paid more for the powerful, and very expensive, defence it provides 22 See: Huggler, J., ‘Angela Merkel rounds on German car chiefs to Germany!” See: ‘Donald Trump says Germany owes in opening election rally’, The Telegraph , 12 August 2017, available US and NATO “vast sums of money” for defence’, at: http://www.telegraph.co.uk/news/2017/08/12/angela- The Independent , 18 March 2017, available at: merkel-rounds-german-car-chiefs-opening-election-rally/, last http://www.independent.co.uk/news/world/americas/ visited: 8 December 2017. See: “The year 2015 marked the us-politics/donald-trump-angela-merkel-germany-owes- start of Merkel’s 10th year as Chancellor of a united Germany nato-money-united-states-defence-a7636686.html, and the de facto leader of the European Union, the most last visited: 8 December 2017. prosperous joint venture on the planet. By year’s end, she had steered the enterprise through not one but two existential 31 See: ‘Remarks by NATO Secretary General Jens Stoltenberg crises, either of which could have meant the end of the union at the European Parliament Committee on Foreign Affairs that has kept peace on the continent for seven decades”. and the Sub-Committee on Security and Defence Quoted in: Vick, K. and Shuster, S., ‘Person of the Year: Committee’, North Atlantic Treaty Organisation , 3 May 2017, Chancellor of the Free World’, Time , December 2015, available at: https://www.nato.int/cps/en/natohq/ available at: http://time.com/time-person-of-the-year-2015- opinions_143400.htm, last visited: 8 December 2017. angela-merkel/, last visited: 8 December 2017. See also: 32 In a September 2017 visit to Estonia, one of the most vulnerable “Isolationism has never served this country well. Whenever we British allies, Mrs May affirmed UK support: “So I am proud turn our back on Europe, sooner or later we come to regret it. that over 800 British servicemen and women are here leading a We have always had to go back in, and always at a much multinational effort, together with their French and Danish higher cost”. Quoted in: ‘PM speech on the UK’s strength partners, and working alongside their Estonian hosts – and that and security in the EU: 9 May 2016 (Archived)’, Gov.uk , this British deployment is one of the largest we have made to 9 May 2016, available at: https://www.gov.uk/government/ Eastern Europe in recent times”. Quoted from: ‘PM’s address speeches/pm-speech-on-the-uks-strength-and-security-in- to British Troops at Tapa Military Base in Estonia’, Gov.uk , 29 the-eu-9-may-2016, last visited: 8 December 2017. September 2017, available from: https://www.gov.uk/ 23 See: Baylis, J., ‘Britain, the Brussels Pact and the continental government/speeches/pms-address-to-british-troops-at-tapa- commitment’, International Affairs 60.4 (1984): pp. 615-629; military-base-in-estonia, last visited: 8 December 2017. see also: Rees, W., ‘Britain’s Contribution to Global Order’, 33 See: ‘The 0.7% ODA/GNI target – a history’, Organisation in Croft, S., Dorman, A., Rees, W. and Uttley, M., Britain for Economic Cooperation and Development , 2017, available at: and Defence, 1945-2000: A Policy Re-evaluation (New York: http://www.oecd.org/dac/stats/the07odagnitarget- Routledge, 2013 [2001]), pp. 29-48. ahistory.htm, last visited: 8 December 2017. 24 See: Simms, B., ‘The world after Brexit’, The New Statesman , 34 See: ‘Development aid cannot be part of defense spending: 1 March 2017, available at: https://www.newstatesman.com/ NATO’s Stoltenberg’, Reuters , 31 March 2017, available at: world/europe/2017/03/world-after-brexit, last visited: https://www.reuters.com/article/us-nato-spending/develop 8 December 2017. ment-aid-cannot-be-part-of-defense-spending-natos-stolten 25 See: Crisp, J., ‘Jean-Claude Juncker tells Britain: “Thanks berg-idUSKBN172234, last visited: 8 December 2017 and for the war … but now you have to pay up”‘, The Telegraph , Shalal, A., ‘Germany’s SPD rejects NATO 2 percent defense 13 October 2017, available at: http://www.telegraph.co.uk/ spending target’, Reuters , 6 August 2017, available at: news/2017/10/13/jean-claude-juncker-tells-britain-thanks- https://www.reuters.com/article/us-germany-election-military- war-now-have-pay/, last visited: 8 December 2017. spd/germanys-spd-rejects-nato-2-percent-defense-spending- target-idUSKBN1AM001, last visited: 8 December 2017. 26 “And for those who claim that we are not good Europeans: 35 Well, did you know that we spend one and half times as See: ‘Net ODA’, Organisation for Economic Cooperation and much on defence as the European average? That is how we Development , 2017, available at: https://data.oecd.org/ stationed troops on Europe’s border in Estonia and in chart/51sb, last visited: 8 December 2017. All subsequent Poland. I call that being a good European. We spend over ODA data used in this Policy Briefing comes from this source. twice the European average helping the poorest people on 36 See: ‘European Council (Art. 50) guidelines for Brexit the planet”. See: CCHQ Press, ‘David Davis: Facing the negotiations’, European Council , 29 April 2017, available at: Future’, Conservatives.com , 3 October 2017, available at: http://www.consilium.europa.eu/en/press/press-releases/2017/ http://press.conservatives.com/, last visited: 8 December 2017. 04/29/euco-brexit-guidelines/, last visited: 8 December 2017. 27 See: “I should add that Allies through the comprehensive 37 In this sense, the British government should also back a political guidance have committed to endeavour, to meet the public relations campaign to correct the harmful narratives 2% target of GDP devoted to defence spending. Let me be spun by those with their own agendas, who are using the clear, this is not a hard commitment that they will do it. But British withdrawal from the EU for their own, often it is a commitment to work towards it”. Quoted from: ‘Press malignant, purposes.