German media reported that a group of EU countries, led by Angela Merkel, are taking a tough line over the Brexit bill ahead of December’s crunch EU Council summit.
On top of Britain’s commitment to cover its share of contributions up to the end of 2020 they want a firm cash offer on pensions and projects stretching into the future.
This would add at least an extra £26 billion to the bill, according to EU calculations, taking the total amount pledged by Britain up to an eye-watering £44 billion.
However, sources close to the negotiations also revealed that the bloc will attempt to soften the blow by withdrawing its demand that London covers the cost of relocating two EU agencies to the continent.
In her Florence speech Mrs May said the UK would honour on its share of the current Multi-Annual Financial Framework – the seven year budgetary cycle which sets EU spending priorities.
Britain’s remaining balance under the mechanism, which runs to the end of 2020, is estimated at around £17.5 billion and the pledge was warmly welcomed by EU leaders.
Mrs May also undertook to fulfil other commitments the UK made whilst a member, which includes pension liabilities for British officials and payments to long-term programmes like the Turkey refugee scheme.
UK ministers have no objection to paying a “justifiable” divorce bill but have held off on committing cash as leverage in their attempts to get the bloc to move onto trade talks.
The stand-off has created a mini-rift within the EU with many countries feeling that Britain has made enough concessions to trigger the second phase of the negotiations.
However movement is being blocked resolutely by France and Germany, who want more assurances on cash as they will be left as by far the two biggest net contributors to the project once the UK leaves.
An source close to the negotiations told German business newspaper WirtschaftsWoche: “We want commitments from the British to the pensions and the joint payment obligations beyond the year 2020.”
The paper reports this would “require Prime Minister Theresa May to put 30 billion euros more on the table than so far promised” – a tough domestic sell for the embattled leader.
However, they will attempt to give the PM a boost by waiving the need for Britain to pay for the relocations of the European Medicines Agency (EMA) and European Banking Authority (EBA) due to Brexit.
Moving the EMA out of Britain is expected to cost £527 million alone, with the prospect of UK taxpayers having to shell out for the process having enraged senior eurosceptics.
German media also reports that the bloc’s latest demands on finances does not mention any British share of liabilities in the future, such as covering defaults on loans paid out by the European Investment Bank.
British officials feel they have offered as much as they politicall can to the EU at this stage and that the onus is now on the 27 member states to move on the talks. At last month’s Council summit the bloc did agree to start internal scoping on a trade deal, but declared there was no “sufficient progress” in the negotiations so far.