London Daily

Focus on the big picture.
Thursday, Dec 25, 2025

Brexit riddle: UK could still bail out EU countries despite leaving bloc

Brexit riddle: UK could still bail out EU countries despite leaving bloc

BREXIT was backed by UK voters in order to secure economic independence from the EU - but claims Britain could be forced to bail out EU countries after leaving the bloc sparked a row.
Bickering between the EU and the UK over a £33billion divorce bill has plagued talks – but Prime Minister Boris Johnson eventually accepted the terms in his withdrawal agreement. Much to the dismay of leavers in the UK, the divorce bill could still be being paid off in 2060, according to the Office for Budget Responsibility (OBR).

The OBR estimated in January that the bill stood at just under £30billion – most of this to be paid by 2022, with some relatively small payments still being made until the 2060s. However, the costly bill could be the least of the UK's worries, as the withdrawal agreement is filled with numerous clauses which threaten to pile on further costs. This is because beyond the divorce bill, the withdrawal agreement between the UK and the EU places future financial liabilities on Britain.

The agreement, which was passed by Parliament and settled on by both the UK and the EU, saddles Britain with a responsibility to pay for a portion of any future losses on those loans and financial commitments, regardless of whether any benefit was reaped from them.

One caveat is that this only applies to loans and commitments made when the UK was still a member state.

The withdrawal agreement states that the UK will pay a portion through the EU budget – around 12 percent – because that is the average contribution the UK made between 2014-2018.

But this figure could change if a European country finds itself in economic turmoil, claimed Bob Lyddon for Global Britain.

He suggested in a 2019 paper that if, for example, Spain, Italy or Ireland are unable to pay their full contribution to the EU budget due to economic struggles, the UK may have to up its contribution to compensate.

As the eurozone is in the midst of its deepest contraction on record in the wake of the coronavirus pandemic, this could become a fear.

Spain was plunged deepest after its economy shrank by 18.5 percent in the April-to-June period, having already fallen by 5.2 percent in the first three months of the year.

The country was the worst performer in the eurozone, which saw its overall GDP decline by a record 12.1 percent.

The official Eurostat agency said the bloc-wide falls were the largest since it began recording the figures in 1995.

However, economic analyst for the Telegraph, Jeremy Warner highlighted that this isn't necessarily true.

He said in July last year that the claim that the UK would have to bail out European countries was an "alarmist and unwarranted claim".

Mr Warner highlighted that former Prime Minister David Cameron secured an arrangement with the EU that eases these concerns.

It read: "Emergency and crisis measures designed to safeguard the financial stability of the euro area will not entail budgetary responsibility for member states whose currency is not the euro, or, as the case may be, for those not participating in the banking union.

"Appropriate mechanisms to ensure full reimbursement will be established where the general budget of the Union supports costs, other than administrative costs, that derive from the emergency and crisis measures."

Mr Warner adds that the UK could be beholden to the so-called Payments Appropriation, but this would require extreme circumstances for these liabilities to be triggered.

He also added that the UK may bail out European countries voluntarily.

Mr Warner added: "It is true that during the last eurozone crisis, the UK did participate in the Irish and Portugese bailouts, but on a bilateral, voluntary basis commensurate with supporting UK interests in these countries.

"These loans are in the process of being repaid with no loss.

"We have no problem standing behind the International Monetary Fund’s sovereign bailouts because we think it is in our own best interests to do so."
Newsletter

Related Articles

0:00
0:00
Close
UK Mortgage Rates Edge Lower as Bank of England Base Rate Cut Filters Through Lending Market
U.S. Supermarket Gives Customers Free Groceries for Christmas After Computer Glitch
Air India ‘Finds’ a Plane That Vanished 13 Years Ago
Caviar and Foie Gras? China Is Becoming a Luxury Food Powerhouse
Hong Kong Climbs to Second Globally in 2025 Tourism Rankings Behind Bangkok
From Sunniest Year on Record to Terror Plots and Sports Triumphs: The UK’s Defining Stories of 2025
Greta Thunberg Released on Bail After Arrest at London Pro-Palestinian Demonstration
Banksy Unveils New Winter Mural in London Amid Festive Season Excitement
UK Households Face Rising Financial Strain as Tax Increases Bite and Growth Loses Momentum
UK Government Approves Universal Studios Theme Park in Bedford Poised to Rival Disneyland Paris
UK Gambling Shares Slide as Traders Respond to Steep Tax Rises and Sector Uncertainty
Starmer and Trump Coordinate on Ukraine Peace Efforts in Latest Diplomatic Call
The Pilot Barricaded Himself in the Cockpit and Refused to Take Off: "We Are Not Leaving Until I Receive My Salary"
UK Fashion Label LK Bennett Pursues Accelerated Sale Amid Financial Struggles
U.S. Government Warns UK Over Free Speech in Pro-Life Campaigner Prosecution
Newly Released Files Shed Light on Jeffrey Epstein’s Extensive Links to the United Kingdom
Prince William and Prince George Volunteer Together at UK Homelessness Charity
UK Police Arrest Protesters Chanting ‘Globalise the Intifada’ as Authorities Recalibrate Free Speech Enforcement
Scambodia: The World Owes Thailand’s Military a Profound Debt of Gratitude
Women in Partial Nudity — and Bill Clinton in a Dress and Heels: The Images Revealed in the “Epstein Files”
US Envoy Witkoff to Convene Security Advisers from Ukraine, UK, France and Germany in Miami as Peace Efforts Intensify
UK Retailers Report Sharp Pre-Christmas Sales Decline and Weak Outlook, CBI Survey Shows
UK Government Rejects Use of Frozen Russian Assets to Fund Aid for Ukraine
UK Financial Conduct Authority Opens Formal Investigation into WH Smith After Accounting Errors
UK Issues Final Ultimatum to Roman Abramovich Over £2.5bn Chelsea Sale Funds for Ukraine
Rare Pink Fog Sweeps Across Parts of the UK as Met Office Warns of Poor Visibility
UK Police Pledge ‘More Assertive’ Enforcement to Tackle Antisemitism at Protests
UK Police Warn They Will Arrest Protesters Chanting ‘Globalise the Intifada’
Trump Files $10 Billion Defamation Lawsuit Against BBC as Broadcaster Pledges Legal Defence
UK Says U.S. Tech Deal Talks Still Active Despite Washington’s Suspension of Prosperity Pact
UK Mortgage Rules to Give Greater Flexibility to Borrowers With Irregular Incomes
UK Treasury Moves to Position Britain as Leading Global Hub for Crypto Firms
U.S. Freezes £31 Billion Tech Prosperity Deal With Britain Amid Trade Dispute
Prince Harry and Meghan’s Potential UK Return Gains New Momentum Amid Security Review and Royal Dialogue
Zelensky Opens High-Stakes Peace Talks in Berlin with Trump Envoy and European Leaders
Historical Reflections on Press Freedom Emerge Amid Debate Over Trump’s Media Policies
UK Boosts Protection for Jewish Communities After Sydney Hanukkah Attack
UK Government Declines to Comment After ICC Prosecutor Alleges Britain Threatened to Defund Court Over Israel Arrest Warrant
Apple Shutters All Retail Stores in the United Kingdom Under New National COVID-19 Lockdown
US–UK Technology Partnership Strains as Key Trade Disagreements Emerge
UK Police Confirm No Further Action Over Allegation That Andrew Asked Bodyguard to Investigate Virginia Giuffre
Giuffre Family Expresses Deep Disappointment as UK Police Decline New Inquiry Into Andrew Mountbatten-Windsor Claims
Transatlantic Trade Ambitions Hit a Snag as UK–US Deal Faces Emerging Challenges
Ex-ICC Prosecutor Alleges UK Threatened to Withdraw Funding Over Netanyahu Arrest Warrant Bid
UK Disciplinary Tribunal Clears Carter-Ruck Lawyer of Misconduct in OneCoin Case
‘Pink Ladies’ Emerge as Prominent Face of UK Anti-Immigration Protests
Nigel Farage Says Reform UK Has Become Britain’s Largest Party as Labour Membership Falls Sharply
Google DeepMind and UK Government Launch First Automated AI Lab to Accelerate Scientific Discovery
UK Economy Falters Ahead of Budget as Growth Contracts and Confidence Wanes
Australia Approves Increased Foreign Stake in Strategic Defence Shipbuilder
×