Jun 19 2017

These Are the Numbers Behind the Brexit Negotiations


U.K. Prime Minister Theresa May initially interpreted last year’s vote for Brexit as a call to clamp down on immigration, which is currently unfettered from the EU. Britain is the second-most-popular destination in the region after Germany, and May is signaling she will impose new curbs.

                                                              Non-British population, by EU nationality

With 2.3 million Europeans working in the U.K., however, bankers, telecommunications companies and farmers are warning the government not to squeeze too hard on a source of much-needed skills.


In choosing to leave the EU, Britain is jeopardizing access to its largest market, which buys about 45 percent of its exports. Following the June election, May is under pressure to do more to safeguard commerce. The EU knows it has leverage, although cutting off access to the U.K. could end up hurting its own companies, which rely on British consumers to buy their goods.

Supporting the European Union

The departure of the U.K. will leave a hole in the EU budget unless Britain agrees to pay something in return for some benefits. Britain is the bloc’s second-biggest contributor, and the gap it leaves behind will need to be filled by spending cuts or by others chipping in more.

EU budgets are stretched over long time frames, meaning members don’t immediately have to cover what they commit to. That leaves the U.K. facing the likelihood of being asked to pay for past commitments.

Looking Ahead

An early flashpoint will be whether the U.K. is willing to pay a divorce bill reputed to be around £50 billion. EU officials say the British need to settle their dues before talk can turn to a trade deal, but May’s government questions both the sums floated and their legality.

What Britain’s bill to exit the EU might be

€24.5B TO €72.8B

A problem for May is that British voters appear to have conflicting goals from the talks. They want less immigration while retaining the advantages of EU membership, such as free trade.

Now it’s time for the EU and U.K. to crunch the numbers in attempt to gain leverage over the other or secure the best possible deal for both. Much will depend on May’s negotiating skills and how strongly the EU wants to avoid others eyeing the exit.



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