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Oettinger: UK to keep paying EU until 2020 despite Brexit

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The UK would have to honor its financial commitments to the EU until "at least 2020," despite Brexit, the EUs budget chief told the German newspaper Bild. The EU is mulling reforms to compensate for Britains absence.

The UK has pledged funds to EUs long-term programs and those obligations would continue even after the countrys scheduled departure from the bloc in 2019, EU Budget Commissioner Gunther Oettinger told the Monday edition of the German daily Bild.

"As a result, London will have to transfer funds to Brussels at least until 2020," he said. Oettingers comments follow a UK media report that London is ready to pay up to 40 billion euros ($47.1 billion) in a way of an exit fee. The EU has previously signaled it was expecting at least 60 billion euros, although French economy minister Bruno Le Maire claimed the UK owed 100 billion euros for its divorce bill.

A source in the office of Prime Minister Theresa May later denied the Sunday report as "inaccurate speculation," according to the Guardian newspaper. Brussels is also reportedly prepared to take Britain to court if it does not agree on the price. Goodbye to mother of all discounts

The EU has an annual budget of some 155 billion euro. With the UK set to leave, the bloc would face an annual budget gap of some 10 to 12 billion euros, according to Oettinger. Brussels officials are considering "a mix" of measures to plug the gap, including budget cuts and higher payments from membership from the remaining 27 members. Germany alone could be required to pay several billions more, the EU commissioner said.

Another measure to offset the financial loss, according to Oettinger, would be to eliminate "discounts" that various states have on their payments to the EU budget. The most significant of those is the so-called UK rebate, a complex financial process established in 1985, which returns several billions back from the EU to Britains budget every year. ?

"If this mother of all discounts is to be abolished through Brexit, all the other membership rebates should also be eliminated," Oettinger told Bild. "That would result in a significant administrative simplification and it would end the horse-trading that has accompanied budget negotiations up to now."

The next round of talks between the EU and the UK is set to start on August 28 in Brussels.

dj/bw (Reuters, AFP, dpa)
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