There continues to be a lack of objectivity in the debate over whether the UK ought to be paying the EU’s ‘Exit bill’. International trade is more than just a matter of lowering tariffs and standardising paperwork.
Such collaborations between countries are often referred to as, ‘Trade and Investment Partnerships’ because they include just that, joint investment schemes between the countries involved.
The EU is essentially just that also, 28 countries trading and contractually agreeing to invest money in different projects for a set period of time. If a company agrees to undertake joint ventures with another company for 5 years, it is expected to pay the money agreed even if later down the line it wishes to end the contract.
Similarly, when we sign a phone contact, we are expected to pay a monthly fee to use it, and to ‘buy-out’ of our contract if we wish to end it early. The same now applies to our membership of the EU.
The UK has agreed contractually to invest money into EU wide projects, and the expectation is to fulfil those contractual obligations. If a company ends a contract prematurely but doesn’t pay its contractual debts, they are viewed with scepticism by all companies who in the future would want to seek a new contract with that company.
It would be a similar result for the UK if it does not pay its contractual debts to the EU. The precise amount is up for negotiation as we do own a percentage of the property that EU institutions use, and according to some, have a share in the funds in the European Central Bank. But, it is the element of walking away which simply cannot be an option.
Should we do so; the very aims of Brexit would be defeated because no country would want to sign deals with us. Our trust and reputation across the globe would diminish overnight. As a country, we would lose our prized AAA credit rating. That means increased interest on all government borrowing as we would no longer be seen as a ‘Safe bet’.
There would also be the messy process of the EU taking the UK to either the Permanent Court of Arbitration or International Court of Justice to retrieve the money we owe them. The process would be costly, long winded and further damaging to our national interest.
It is therefore essential that a country always pays its debts. The UK is widely seen as pragmatic and trustworthy. To walk away without paying its debts would have disastrous results to our economy and reputation.
Chair of Crawley Liberal Democrats
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