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The UK’s potential trillion euro counter-claim against the EU

High-stakes negotiations over Britain’s future liabilities to the EU should be entered with an ambitious counter-claim against the EU

The UK should issue a counter-claim to the EU’s ‘Brexit Bill’ many times the sum being mooted by Michel Barnier if it is to get the best deal it can in negotiations over the divorce, a new paper published by Civitas today argues.

Miles Saltiel urges ministers to avoid ‘taking a knife to a gunfight’ which would be the effect of restricting their claims to a proportion of the €60 billion bill that Michel Barnier is thought to have in mind.

Instead, government negotiators should invoke provisions of the Lisbon Treaty that oblige the EU to assume liability for its actions and issue a counter-claim that could potentially run to €1 trillion.

Saltiel writes: ‘The word is that Barnier is going for €60bn or so. If he sticks to this, HMG’s negotiators would want to steer clear of taking a knife to a gunfight: they would wish to avoid the unforced error of confining their counter-claim to the €10bn of EIB assets apparently attributable to the UK or even to the larger sums in the ether, said to equal Barnier’s own €60bn.’

He calculates that the following sums could form the basis of a counter-claim:

1. Contributions since the UK’s accession to the EU that have been expended fraudulently, extravagantly, so lethargically as to defeat their purpose, under protest by HMG or UK MEPs, failing to satisfy auditors, or otherwise at odds with good practice: €200bn

2. Compensation for the accumulation of past increased military expenditure arising from EU recklessness in the Western Balkans and the Ukraine: €65bn

3. Compensation for the accumulated loss of past output since 2009 for the failure since then to honour commitments to implement the Service Directive in full: €35bn

4. Compensation for the accumulated loss of past output since the UK’s accession to the EU for its failure to ratify Free Trade Agreements in a timely manner with Canada, Korea, Singapore, South Africa, and Vietnam: €15bn

5. Compensation for the EU’s failure to initiate FTAs with Australia, China and Taiwan, and to conclude FTAs with Brazil, India, Japan and the US: €80bn

6. Present value of the accumulated and post-Brexit incremental NHS, social care and other expenditures for treating persons adversely affected by diesel and other pollution from motor vehicles, conforming or purporting to conform to emission regulations stemming from the Vehicle Directive (2007) and thereby represented by EU or member-state regulators as safe: €200bn

7. Costs of economic output forgone, plus converting electrical power supply to efficient operation, to reverse the adverse effects of the Renewable Energy Directive (2009): €180bn

8. Present value of the post-Brexit costs of incremental education, health, security and welfare expenditures, arising out of persons residing in this country by reason of failings of border security falling out of the Schengen system, detrimental judgements of the ECJ, or other EU or member-state dysfunctions: €35bn

9. Loss of output and stabilising the UK financial system in the event of failures by UK branches of European banks, passported into this country under EU single-market rules and whose prudent and timely recapitalisation has been frustrated by the ECB or member-state regulators: €55bn

10. Loss of output and stabilising the UK financial system and economy in the event of the failure of the Euro; reserving the right to obtain punitive damages for such injuries should it be shown that the ECB has interpreted its mandate at odds with the intentions of its framers; to the detriment of the public good; under protest from pertinent central banks, regulators or international bodies; at odds with the advice of its auditors; or otherwise recklessly: €200bn

11. Token compensation for loss of reputation for association with the EU’s chronic dysfunction and maladministration: €25bn

‘Not every claim can be expected to succeed in full, if at all. But all of them are (as the lawyers say) arguable,’ Saltiel writes.

‘It is most likely that the EU would reject the UK’s complaints out of hand, but to the extent that a dispute was joined and played out before the bar of world opinion, the EU’s negotiators would face some bear-traps. For example they would court disrepute, were they tempted to hide behind the Treaty’s provisions for limitation periods and jurisdiction (IV, 4, Article 46).

‘This is not so much because the conduct giving rise to these claims continues to this day, but rather that such a stance would position the EU as challenging the widely accepted principle of nemo judex in sua causa (no-one may judge his own cause).’

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