Britain must settle any outstanding EIB loans when it finally leaves EU, says European Commission

With the deadlocked Brexit talks continuing over the summer, the UK’s financial position with the European Investment Bank (EIB) has recently come under the spotlight.
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By Martin Banks

Martin Banks is a senior reporter at the Parliament Magazine

07 Aug 2020

Some British MPs have called for a renegotiation of the UK’s reported liabilities for EIB investments, which are said to run to some €160bn.

A Commission spokesman declined to comment on such demands but said it had been agreed by both sides that the UK would meet all legal commitments regarding EIB loans while it was still an EU member.

This, it was noted, was underlined by the Withdrawal Agreement, “a firm document which has been accepted by both sides,” said the spokesman.

The EIB is owned by the EU Member States and the UK’s decision to leave the EU has raised doubts over what would happen to its 16 percent stake in the bank, which is the joint highest share along with Italy, France and Germany.

Last year the EIB group, which also includes the European Investment Fund, signed financing worth €72.2bn for more than 1,200 projects, of which €63.4bn were in the EU and €8.8bn outside the union.

It supported a total investment of €280bn, of which 31 percent was for climate-related projects. The EIB has set a target of ensuring that half of its finance goes towards climate projects by 2025. It has set a target of €1tr of climate investment by 2030.

The two chief negotiators from the EU and UK and their teams met in London last week where informal discussions continued.

“The EIB is owned by the EU Member States and the UK’s decision to leave the EU has raised doubts over what would happen to its 16 percent stake in the bank, which is the joint highest share along with Italy, France and Germany”

The next formal negotiating round (round 6) will take place in Brussels, beginning on 17 August.  Both sides also published a revised schedule of talks last week for the next couple of months.

David Frost, the British negotiator, warns that “considerable gaps” remain in the most difficult areas: the so-called level playing field and on fisheries.

He says, “We have always been clear that our principles in these areas are not simple negotiating positions but expressions of the reality that we will be a fully independent country at the end of the transition period.”

“That is why we continue to look for a deal with, at its core, a free trade agreement similar to the one the EU already has with Canada – that is, an agreement based on existing precedents. We remain unclear why this is so difficult for the EU, but we will continue to negotiate with this in mind.”

The UK is currently in a transition period for its EU exit which will end on 31 December. If there is no trade deal with the EU by then, the UK will revert to WTO rules.

Meanwhile, new research says that the number of British nationals emigrating to other EU countries has risen by 30 percent since the 2016 EU referendum, with half making their decision to leave in the first three months after the vote.

Analysis of data from the Organisation for Economic Co-operation and Development (OECD) and Eurostat shows that migration from Britain to EU states averaged 56,832 people a year in 2008-15, growing to 73,642 a year in 2016-18.

The study also shows a 500 percent increase in those who made the move and then took up citizenship in an EU state.  Germany saw a 2,000 percent rise, with 31,600 Britons naturalising there since the referendum.

“These increases in numbers are of a magnitude that you would expect when a country is hit by a major economic or political crisis,” said Daniel Auer, co-author of the study by Oxford University in Berlin and the Berlin Social Science Centre.

Elsewhere, the British Foreign Office has launched a campaign to inform its nationals living in Belgium about the steps they need to take “to protect their rights” ahead of the end of the Brexit transition period on 31 December.

This is part of a Europe-wide campaign and focuses in particular on access to health care services, validating a driving licence, obtaining a passport or obtaining a residence permit.

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