UK PM May's spokesman: We do not recognise reported 40b euro Brexit bill

[LONDON] Britain does not recognise media reports that the government is willing to pay 40 billion euros (S$71.909 billion) to exit the European Union, Prime Minister Theresa May's spokesman said on Monday.

The so-called "exit bill" is one of the first issues on the Brexit negotiating agenda, and also one of the most contentious. The EU has floated a figure of 60 billion euros, while Britain has not indicated how much it would be prepared to pay.

The Sunday Telegraph reported that Britain would be willing to pay up to 40 billion euros, citing three unnamed sources familiar with Britain's negotiating strategy.

"In terms of this figure, I don't recognise it," Mrs May's spokesman told reporters.

"The prime minister made clear in the letter triggering Article 50 (the EU exit process) that the UK and the EU need to discuss a fair settlement of both our rights and obligations as an EU member state."

Britain has less than two years to negotiate the terms of its exit from the EU - an unprecedented untangling of more than 40 years of legal, economic and political ties.

Early rounds of talks have made little progress, with the EU's negotiating team demanding more clarity from Britain on what it wants.

When asked whether Britain and the EU were expecting to come up with a firm figure for the exit bill at this stage in the talks, or a less precise agreement covering the rules which would be used to calculate it, the spokesman said: "I'm not getting into a running commentary on the negotiations or the precise structure of them".

He repeated that answer when asked whether the 40 billion euro figure was lower than the government was willing to accept, or whether the government had actually calculated an amount it was prepared to pay.

The bill is expected to be made up of money Britain has already committed to the multi-year EU budget, ongoing financial risks it agreed during its membership to help cover, and a contribution to the pension scheme for EU officials.

The size of the bill will also heavily depend on the shape of Britain's transitional agreement - a staggered exit process which could see the government paying into EU regulatory schemes while new domestic ones are established.

Britain has yet to set out what kind of transitional deal it is seeking, making estimates of the final bill difficult to calculate.

As well as finding a deal that satisfies both an EU establishment keen to deter other members from trying leave, and the strained purse-strings of the British budget, Mrs May must also reach an amount her own political party is prepared to swallow.

Some eurosceptics within her own party argue Britain should not have to pay anything at all, and any settlement perceived to be generous to Brussels could prompt revolt within the Conservative ranks.

After Mrs May lost her majority in a national election earlier this year, a rebellion of more than a dozen or so Conservatives would endanger her chances of getting the Brexit deal, and all the necessary supporting legislation, approved by parliament.

REUTERS