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Brexit can't free Britain from sharing EU costs, Denmark warns

Wednesday, August 31, 2016 - 13:58
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Denmark's government suggested that Britain shouldn't be allowed to stop paying toward European Union projects that were started while it was a member, as governments position themselves ahead of talks on how to extract the UK from the 28-nation bloc.

[COPENHAGEN] Denmark's government suggested that Britain shouldn't be allowed to stop paying toward European Union projects that were started while it was a member, as governments position themselves ahead of talks on how to extract the UK from the 28-nation bloc.

"These are huge negotiations that need to take place. It's not just as if everything can continue, minus Britain," Danish Finance Minister Claus Hjort Frederiksen told Bloomberg.

"The talks that lie ahead will touch on the fact that Britain will inherit a lot of things that are already under way, and they can't just turn their backs on those costs."

The notion of making Britain pay for continued relations with the EU is gaining traction in the bloc, with an ally of German chancellor Angela Merkel this week saying the UK won't be granted access to the single market unless it contributes to the EU's budget.

The UK paid about £13 billion (S$23 billion) to the EU budget in 2015 although it received about £4.5 billion from the EU for its own projects. Prime Minister Theresa May has said she won't trigger Article 50 of the EU's Lisbon Treaty, the formal procedure for beginning a withdrawal, before the end of the year. She also made clear this week that parliament will have "a say", potentially adding a layer to the process.

The Danish Finance Minister said Britain will be missed as a key ally in promoting budget restraint across the bloc. He also said the government needed to cut its economic forecasts for this year and next, in part because of the ramifications of Brexit for international trade.

"It's clear that it's a loss for us that Britain has left," Mr Frederiksen said. But the scale of the loss, both political and economic, remains hard to define, he said.

"In reality, Britain went through a devaluation" after its referendum, the minister said.

"That's of course created a lot of activity in the short term, but it's clear that the uncertainty will spread in the longer term. We can't quantify that."

BLOOMBERG

For more coverage of the EU referendum, visit bt.sg/BrexiT.

 

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