Boris Johnson could be made to forfeit the UK’s mother of all rebates if he eventually decides to extend the country’s stay in the European Union’s single market and customs union. European capitals have spent months rowing over how to plug a £65billion Brexit blackhole left in their finances as a result of the UK’s departure on January 31. Diplomats and officials expect the Prime Minister to submit a request ahead of the June 30 deadline because of the ongoing coronavirus crisis, which would trigger an immediate negotiation over Government’s continued contribution to the EU’s multi-annual budget.
A senior EU diplomat said: “If we were to grant a delay, that would require some negotiations on the membership fee that has to be paid for 2021.”
Cash-stricken member states faced with economic turmoil due to the coronavirus could throw down the gauntlet and use the talks to demand the maximum amount of cash from British taxpayers.
This could include a rebate won by Margaret Thatcher in 1984 being scrapped, dramatically increasing the cost of any extension to Britain’s de facto membership of the bloc.
One EU source said: “There’s a position where national parliaments welcome the UK’s decision, but there’s also a chance they would really welcome the UK paying into the MFF at full price without the rebate.”
Some in Brussels are keen to ensure their cash demands are seen as “manageable” to allow Mr Johnson to present the extension as a minor victory to Brexiteers.
Talks over the EU’s next seven-year budget collapsed in February before the Continent was engulfed by the coronavirus outbreak.
To fill the Brexit gap and fund new EU projects, Germany, the Netherlands, Austria and France were all faced with multi-billion euro hikes to their financial contributions.
The European Commission, whose officials were in favour vastly increasing the bloc’s spending, proposed a budget of 1.14 percent of Gross National Income.
This could see the UK sending as much £26billion a year to Brussels while remaining inside the single market and customs union during any transition extension if the rebate is removed.
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Downing Street remains adamant that it will leave the transition period, which ends on December 31, on time.
A Government spokesman said: “We remain absolutely committed to continuing the negotiations. Everybody knows the timetable that they are working to.”
But recent polling analysis showed that a clear majority of Britons favour extending the transition period to allow Mr Johnson more time to secure a trade deal with Brussels.
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The research shows just 19 percent of Britons currently back the Government’s position to leave, with or without a deal, at the end of the year given the impact of the global pandemic on the trade talks.
Support for an extension has been growing in recent weeks, WPI Strategy’s research found 67 percent of participants would support the Government in pursuing a delay beyond December.
Whereas on March 20, YouGov found that 55 percent of people would support extending the transition period with negotiations ground to a halt because of the coronavirus outbreak.
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