U.K. Warns EU Not to Play Brexit Hardball Over Investment Bank

  • Britain won’t be part of EIB after it leaves the EU in 2019
  • Government sees leverage in the amount it provides to lender

Portes Says U.K. Is Running Out of Time on Brexit

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Britain will warn the European Union next week not to make greater financial demands over its contributions to the bloc’s investment bank, a person familiar with Brexit negotiations said.

The U.K. contributes about 16 percent of the capital in the European Investment Bank, which the EU uses to fund infrastructure projects. That means that in theory Prime Minister Theresa May could seek reimbursement on its investment of some 10 billion euros ($11.8 billion) when the U.K. pulls out.

There are good reasons why the U.K. would not want to follow through on that: it would affect some buildings and roads in the country that depend on those communal funds.

The EU’s position is that paid-in capital should be reimbursed. But it has also raised the prospect of the U.K. having additional liabilities. The EU should be careful about taking an aggressive stance over the issue, the person familiar with the talks said on condition of anonymity because the discussions are private.

The EIB has suspended funding public projects in the U.K. through new long-term loans, the Times reported this week. The newspaper said the EIB financed 6.9 billion pounds ($8.8 billion) of infrastructure projects in Britain last year.

Brexit negotiations resume in Brussels on Monday. The divorce bill is set to be the biggest obstacle to talks before progressing to the future of trading relations as soon as October.

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