London Daily

Focus on the big picture.
Wednesday, Oct 01, 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
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
Nvidia Pledges Up to $100 Billion Investment in OpenAI to Power Massive AI Data Center Build-Out
U.S. Signals ‘Large and Forceful’ Support for Argentina Amid Market Turmoil
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
Vietnam Faces Up to $25 Billion Export Loss as U.S. Tariffs Bite
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Indonesia Court Upholds Military Law Amid Concerns Over Expanded Civilian Role
Larry Ellison, Michael Dell and Rupert Murdoch Join Trump-Backed Bid to Take Over TikTok
Trump and Musk Reunite Publicly for First Time Since Fallout at Kirk Memorial
Vietnam Closes 86 Million Untouched Bank Accounts Over Biometric ID Rules
×