EU members will play 'hardball' with 'British dosh', MPs are warned
EU members will want a big cash sum in return for the "biggest ever" free trade agreement and transitional deal, says Ivan Rogers.
Wednesday 22 February 2017 13:41, UK
European leaders will play "hardball" and demand "British dosh" in return for a free trade deal from the start of Brexit negotiations, the former UK ambassador to the EU has warned.
Sir Ivan Rogers said the issue of Britain's Brexit bill would be an issue from the start of negotiations and he predicted it would come to a head at a "gory" meeting of European leaders in autumn next year.
Speaking to MPs on the Brexit select committee, Sir Ivan said the remaining 27 EU members would come up with a cash figure cost for a transitional deal and a free trade agreement.
However, he added that the loss of the British contribution to the EU would be significant and therefore could be used as a bargaining chip on both sides.
He said: "I think we can expect a number of them (EU countries) to think - well, if the British want a future trade deal, and they want some form of transitional arrangement before a future trade deal - all big ifs - then this will come together at some gory European Council in the autumn of 2018 and it will come together with the money equation.
"There will be some who will want to play hardball and say, 'well, absent British money over a transitional period, why the hell should we give them any trade deal?'"
Sir Ivan, who resigned last month, sparking controversy, repeated his claim that it would take until the mid 2020s before there was a full divorce agreement and free trade deal with the EU.
He said the UK needed to try to negotiate the "biggest free trade agreement ever struck" that should be "unprecedentedly good and bespoke".
Sir Ivan added that falling back on no deal and World Trade Organisation rules would leave the UK in a "legal void" which would cause "massive damage from day one".
He also warned that the Government should not make any agreements on the trade of goods without an agreement on financial services.
This is because the UK exports more financial services to the EU, while the EU has a surplus on goods to the UK.
Theresa May has made clear she wants trade deal discussions to run parallel with divorce agreement negotiations - a position German chancellor Angela Merkel has indicated she agrees with.
However, in his comments to MPs, Sir Ivan warned that he expects a "stand-off" from the outset on what the discussions will include.
His comments came at the same time as the former president of the European Council said that striking an agreement would be a "Herculean" task.
Herman van Rompuy said that both sides would take "irrational positions" as they attempted to thrash out divorce agreements and shape the trade deal between the EU and UK.
In a speech in London, he said: "The negotiations will be large and difficult.
"No one knows how long, but two years will not nearly be enough.
"The length of the negotiations itself can undermine trust and push some to irrational positions."