U.K. Must Honor EU Obligations in Brexit, Germany's Spahn Says

  • Deputy finance minister bristles at talk of EU ‘exit fee’
  • Warns U.K. campaign rhetoric may make Brexit talks harder

U.K. Must Meet Its Obligations in Brexit, Says Spahn

German Deputy Finance Minister Jens Spahn said the U.K. can’t escape its financial obligations to the European Union and called on British politicians to restrain harsh Brexit rhetoric that may make talks with the EU more difficult.

Asked in a Bloomberg Television interview about the talks that are expected to begin soon after the U.K.’s general election on June 8, Spahn said it’s critical that the British government quickly name a chief negotiator. The other 27 EU countries have already tapped Michel Barnier for the job and agreed on a broad negotiating mandate.

U.K. must meet its obligations in Brexit, Spahn says.

Source: Bloomberg

“What I find important is that we have on both sides still room for maneuver to compromise,” Spahn, a deputy to Wolfgang Schaeuble, said in London on Thursday. “The harder the rhetoric is in a campaign, the less room might be there for compromises.”

Estimates put the amount the EU wants the U.K. to pay for past commitments and its share of continuing projects at as much as 100 billion euros ($112 billion) in gross terms. Asked about that so-called exit fee, Spahn rejected the term as a distortion of what’s at stake.

“It’s not a fee,” he said. “It’s obligations we made together and we should fulfill these.”

QuickTake Q&A: Brexit’s Costs and Whether Britain Will Pay Up

Spahn suggested that Germany isn’t overly concerned for now about hearing a range of voices on Brexit within Prime Minister Theresa May’s government, though that would have to change for the negotiations.

“What is crucial is that we have a common mandate,” he said. “We finally found one on the European Union side in the past two weeks and I think we will see the same on the British side. I don’t have any worries that it won’t work.”

May has criticized the EU as part of her election campaign, accusing its officials of meddling in U.K. affairs and arguing voters should hand her a strong mandate so she can take on the bloc.

On other topics, Spahn said:

  • Chancellor Angela Merkel’s government welcomes a bigger role for Frankfurt as a financial center as a result of Brexit, though “London will of course remain a very important financial hub.”
  • Germany wants to avoid Brexit talks leading to “a race to the bottom” on regulatory standards, echoing a warning by Schaeuble in January on corporate taxation.
  • EU-U.K. divorce talks will be “the mother of negotiations” due to the complexity of effectively reverse-engineering a trade relationship.
  • It’s time for a “prudent start to exit” the euro area’s low interest-rate policy, a cause of growing concern among German savers. 
    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE