September 28, 2017 / 7:13 PM / a year ago

'Biggest ever' EU budget overhang casts shadow on Brexit bill

BRUSSELS (Reuters) - The overhang of delayed payments yet to be made from the EU budget reached its highest ever level last year, the EU auditor said on Thursday, highlighting an ominous turn as Britain haggles over its Brexit bill.

An EU flag is waved near the Houses of Parliament in central London, Britain September 22, 2017. REUTERS/Toby Melville

The 28 current member states, including Britain, committed to pay nearly 1 trillion euros (£892 billion) over the period between 2014 and 2020, the current EU budgetary period. But delays in some of the projects and programmes that draw down those funds mean that a hefty 239 billion euros remains unspent.

Known by the French term “reste a liquider” or RAL, this overhang pushes into the next seven-year budget. But EU Brexit negotiator Michel Barnier said that Britain is refusing to settle bills beyond 2020. Prime Minister Theresa May made that concession to pay beyond Brexit in March 2019 only last Friday in a speech in Florence aimed at unblocking talks.

Barnier insists Britain will owe a share of all outstanding obligations the Union has entered into while Britain has been a member. Some of those may not be paid out for years.

Publishing its annual report on Union finances, the European Court of Auditors warned that “the total payments the EU is committed to making from future budgets were higher than ever”.

It urged officials to make a priority of clearing the backlog, which stood at 217 billion euros at the end of 2015. But it rose by 10 percent over the course of last year.

Calculating a British share of the reste a liquider could be one of the toughest tasks for negotiators. Typically Britain has contributed around 15 percent of the EU’s receipts. Brussels has estimated the total “Brexit bill” could be around 60 billion euros — a figure dismissed by May’s government as outrageous.

Part of that sum, due in March 2019, would include roughly 20 billion euros for the 2019 and 2020 budget years. But if Britain stays in the single market for a transition over that period, it may not have to pay those amounts up front.

However, the EU will still want Britain to pay a share of the reste a liquider beyond 2020, as well as funds to cover, for example, the future pensions of EU staff who have earned pension rights during the by then 46 years of British EU membership.

Reporting by Francesco Guarascio; Editing by Alastair Macdonald and Matthew Mpoke Bigg

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