In the current furore about the claim the UK will owe the EU tens of billions of euros when we leave, one rather obvious point seems to have been missed. EU leaders insist that the UK and EU must agree on the principles to be applied in calculating any monies owed before we move on to negotiations about a free trade agreement. But, at least for much of the alleged sum owed, why do we need to agree new principles instead of using the principles that have already been used many times?
Allow me to explain. EU leaders claim that the UK owes money for things like pensions obligations incurred of EU staff, mortgages on buildings, and structural funds or other development assistance promised by the EU when the UK was a member. Various commentators claim that some of these amounts are legal obligations, or political undertakings rendered obsolete by Brexit, or political-but-not-legal obligations that we should pragmatically pay out on if we get some reasonable accommodation on trade in return.
There might be dispute about exactly what fits in which box, but should there really be dispute about the principles involved as to what is or is not owed? After all, changes in the membership of the EU and before that the EEC are not a new thing. There were membership changes in 1973 (UK, Ireland, Denmark), 1981 (Greece), 1986 (Spain and Portugal), 1995 (Austria, Finland and Sweden), 2004 (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, Malta and Cyprus), and 2007 (Bulgaria and Romania). Why don’t we use the principles used in these cases for attributing liabilities?
For example, when the UK joined the EEC in 1973 there must have been staff employed by the EEC prior to 1973. There were presumably buildings the EEC had purchased or taken out leases on prior to 1973. And there must have been regional assistance funds promised, before 1973, to parts of, say, Italy. So if the EEC and EU have, up to now, operated on the principle that liabilities accrue to those that were members when decisions were taken (rather than some alternative principle, such as liability being a liability of the Union underpinned by contributions from whoever happens to be a member at the time payments fall due rather than when decisions were taken), adjustments must have been made to contributions to reflect these things. For example, the UK’s contributions must have been adjusted downwards and the French and German contributions adjusted upwards to take account of the fact that the French and Germans had accrued liabilities before the UK joined.
The same would apply to subsequent accessions, and it should be straightforward to detail what adjustments were made. How much lower, say, were Bulgarian EU contributions because the Bulgarians weren’t funding pre-2007 EU pensions entitlements? Or Czech contributions because they were not funding pre-2004 structural funds promises? Or Polish contributions because they were not funding pre-2004 buildings mortgages?
By detailing the principles used up to now, we and the EU27 should be able to establish, fairly straightforwardly, which are the consistent principles to apply. Perhaps there might still be some debate about whether special circumstances apply, so the UK might for those special reasons have extra obligations in some areas and lesser obligations in others. But there would be a baseline.
If, for example, when EU membership changed in the past, there were adjustments for pensions accruals but not for buildings mortgages or structural funds undertakings, then the baseline principles would presumably be that the UK should fund accrued pensions but not mortgages or structural funds.
And of course, in the presumably unlikely event that it turned out that no such adjustments had been made in the past, but that all payments were a matter of political argy-bargy, we could conclude that the baseline obligation for the UK would be zero. That would not mean we should not choose to pay anything for pragmatic reasons, but the approach I have sketched here would at least make clear what was an actual obligation and what was a negotiating point.