LONDON — London and Brussels are embroiled in a new Brexit row over up to €300 million in U.K. contributions to the EU’s emergency coronavirus fund.
British officials have questioned the size of the U.K.’s contribution to the €3 billion “Emergency Support Instrument,” set up to help member countries respond to the pandemic. They argue that, under the terms of last year’s Withdrawal Agreement, the U.K. should not be liable to pay for major changes to the EU budget introduced after Brexit took place.
Under the terms of the transition period, the U.K. — while not having a say in EU decision-making — must continue to pay into the budget for 2020, and also retains the benefits of EU membership. However, British officials argue that around two-thirds of what the EU is asking the U.K. to pay into the COVID-19 fund falls outside the scope of what was agreed in the Brexit deal.
Officials raised the issue at last month’s meeting of the Specialized Committee on Financial Provisions — one of the joint U.K.-EU committees tasked with implementing the terms of Brexit deal.
The sum under dispute is hard to calculate precisely, as it is made up of several funding commitments, but amounts to between €200 million and €300 million, U.K. officials estimate.
The British position is that the U.K. should not be liable to pay any commitments that stem from post-Brexit changes to the EU’s Multiannual Financial Framework (MFF) regulations — and nor should it benefit from such funding. About a third of the U.K.’s overall commitment to the coronavirus fund is not under dispute, because British officials consider that it comes under previously agreed “flexibilities” in the MFF regulations.
A spokesperson for the U.K. Treasury said, “The U.K. is supporting the EU’s efforts to tackle coronavirus, and we’ll meet our obligations through the Financial Settlement. But we do not intend to go beyond what we have agreed in the Withdrawal Agreement, because we have now left the EU.”
However, a European Commission official said the U.K. remains “fully liable to contribute to — and fully eligible to benefit from — the Emergency Support Instrument.”
“This topic was discussed in the recent Specialized Committee on Financial Provisions to better clarify the position and with a view to identify a practical approach to solve this issue,” the official said.
The dispute adds another layer of friction to U.K.-EU relations as the fourth round of talks on the post-Brexit relationship comes to an end on Friday.
Previous rounds have failed to bridge vast gaps in the two sides’ positions and chief negotiators Michel Barnier and David Frost have traded barbed letters in recent weeks. The EU insists the U.K. should align with its regulations to ensure a “level playing field” as the basis of any free-trade agreement, while the U.K. refuses to sign up to anything that it believes would compromise its post-Brexit sovereignty, and insists that a Canada-style trade deal is possible without binding the U.K. to EU laws.