Negotiation Nonsense

Finance: Reste à Liquider (RAL)

This is a phrase which has become prominent on the EU side as constituting a claim on Britain of enormous dimensions: i.e. our share (12.8%) of the EU population (512 million on 1st January 2017) multiplied by the European Commission (EC) estimate of RAL (€254 billion) or €32 billion.

This caused extensive discussion among certain witnesses called before the House of Lords EU Committee recently. Discussion focussed on our fair share of this curious thing called Reste à Liquider (RAL) which is defined as “the amount of appropriations committed by the European Commission that have not yet been paid to the beneficiaries”, i.e. to the member states and certain science programmes like Horizon 2020.

Now here is the key point which our pathetic negotiators and the House of Lords witnesses don’t seem to have noticed. Under the Lisbon Treaty all commitments made by the EC have to sit within the Multiannual Financial Framework (MFF). The MFF is a few percentage points bigger than the sums of the annual budgets which for 2017 are €157 billion commitments, actual payments €134 billion. Moreover the current year’s spending by the EC is automatically balanced by requiring the Member States to make good any shortfall, again as required by the Lisbon Treaty.

Now, clearly €157 billion is not a “few percent” bigger than €134 billion. It’s €23 billion bigger, almost double the UK’s net 2017 contribution of €12 billion. The EC needs to be rigorously cross-examined as to why this huge discrepancy has arisen in the year after Britain’s Brexit vote.

Britain pays the EU its budget dues on time, in full. If the EC, which is a financial entity quite distinct from the member states, cannot balance commitments and expenditures within a reasonable time frame – say 3 years at most – then that is its fault. The remedy lies in reducing current expenditure to pay for outstanding commitments – some of which may not actually exist as has happened in the past.

The whole issue of RAL has been absurdly misconstrued. It is not for the EU to levy, nor Britain alone to pay, when leaving, a charge based on its population and a largely fictional RAL. The disrespectful, almost insolent, language used about Britain by its chief negotiator, Michel Barnier, is indicative of the patsies the EU have up to now regarded the British to be[1].

To use the famous Golf Club analogy introduced by Jean Paul Juncker recently, the leaving member would expect to pay his bar bills for liquor actually consumed, but not to pay a sum in respect of liquor which the other members might plan to consume in the future, nor pay for repairs to the club roof at some hypothetical time in the future.

This underlines another fundamental point. If Britain pays anything under the various headings – it should only be on the basis that the other member states are paying too and only during any transition period, and only tapered amounts during that period as advocated in the book “Britain’s Referendum Decision and its Effects”[2] Chapter 11.2.4.

End Notes

[1] With good reason, given their ready capitulation to the EU demand to exclude trade talks until the UK has agreed to all their demands on finance, the status of EU nationals in Britain, the wholly confected ‘problem’ of the Northern Ireland land border, and of course the role of the European Court of Justice in our affairs after we leave on March 29th 2019. Regarding the latter, a senior member of the Law faculty at Leuven in Belgium has commented this was an insulting demand to make of a “great people”.

[2] Published by Technomica, ISBN 9 780993 110894 available on Amazon or downloadable from this website.


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