Time to Pay the Piper: £50billion?

Our Brexit negotiators could learn a lot from this fairytale.

May’s Florence Speech made it clear that no European nation would be worse off as a result of Britain leaving the European Union. Before we can commence with the brokering of a sympathetic deal, however, and begin to appease those across the Irish Sea, (was that £10billion well spent, Theresa?), the EU has insisted that we must settle our divorce bill. On the 10^th of November, 2017, Michel Barnier set a two-week deadline for this financial settlement. At the time David Davis laughed this off, and although we are a month on now and nothing has been officially decided, the EU will have the last laugh. We will not be doing simultaneous negotiations, and it also looks like we will be paying. At first we were considering paying £40billion. The EU were supposedly thinking of £60billion. Recent reports have both sides agreeing to settle at around £50billion. Much like the good people of Hamelin, it looks like we will end up paying the piper his price. Despite Boris’ misgivings, the Pied Piper Michel Barnier will be able to “go whistle” and get his money.

Section 3 of Article 50 states that EU treaties do not apply to us after two years have passed. In theory, this means that financial arrangements which extend beyond 2019 should not be needed; a legality which held up in the House of Lords Report. Ultimately, though, the problems Brexit will create are political. If all that we needed to do was settle our divorce bill then the matter could be settled through a neutral tribunal. But there are too many political problems which must be resolved, and, as such, we have decided to settle.

With Britain leaving the EU, the EU will be left with a hole in its finances and the choice of either increasing payments or decreasing spending. Therefore, in wishing the best for our friends across the channel, it might sit better on our national-conscience to pay them handsomely until we see our 2019 commitments off. Then again, we are a net contributor, and also have our assets to think about. Take the granular but illustrative issue of the EU wine cellar, which reportedly has 42,500 bottles to share between members of the EU Commission and the EU Parliament. This astonishing headache was paid for by member states, and so, if the EU were to dissolve tomorrow, then everyone would have their share returned; hence, and even though it is only us who are leaving; shouldn’t we be entitled to a glass of wine? If not, then who gets the wine? We know Junker wants the wine. This is a far from trivial matter (a toast! – to Junker’s good health) because the same debate must be had about all our other EU assets, assets worth millions, such as the 16% share we have in the European Investment Bank.

Who – in the eddying final chapter of an adversarial marriage – is the Pied Piper of Hamelin? Is it really Michel Barnier? What would that make Theresa May? – the Mayor of Hamelin? Such casting doesn’t seem to fit. Instead, it is surely we, Britain, who acts, who instigates, who sends out the negotiating team, and who is poised to sally off into the sunset while threatening to take the EU’s children with us (come, come, Catalonia, dear). It is we who are the piper. And a German town, riddled with its own internal domestic travails, wanting to keep as much gold as it can to keep its streets rat-free for as long as it can? Yes. Surely these fairy-tale roles are more accurate. Isn’t Brexit all about us, anyway? Aren’t we the protagonist?

If yes, then in deciding to give the EU such a large sum we have deviated from the archetype. For the piper is to pay out, and not get paid.

So what will Hamelin use the piper’s money for? The EU will use our payment to fund its Multiannual Financial Framework (MFF). According to the Clifford Chance Law Firm Report, the total expenditure between 2014 – 2020 amounts to only 1 % of aggregate EU member-states annual GDP. Although seemingly a small amount – 1% of GDP is in fact no trivial matter for a EU member-state. Losing funds is therefore a significant problem for Brussels, maybe even an insurmountable one, because unlike nation-states the EU’s charter forbids it to run a budget deficit. This means that the EU can only meet its payments through raising money via customs duties, VAT, and state payments. State payments are its primary form of income, amounting to 70% of the total EU budget. If the EU does not have such payments, and it cannot borrow, then either projects must be cut or the Germans and French must fork-out more for services in eastern Europe. The President of the European Parliament, Antonio Tajani, once demanded that the UK give the EU their “money back”, despite also calling it “peanuts”. The people of Hamelin can’t have it both ways. Either they need the piper’s money, or they don’t.

At this point in time, it feels like Britain is not an actor with agency in this story. At one point, before it emerged that we would be paying the c.£50billion lump, I naively thought that May might have some sort of plan for Brexit. I thought – ‘Hey! Maybe our plan is to seem totally disorganised; to appear so completely and utterly disorganised that our blasé demeanour will, at the very last moment, cause such a panic in the EU that they would cave in to the wishes of their business-leaders.’ I knew a plan like this wouldn’t work, but at least we would have a plan. I just couldn’t believe that the cabinet could be so bad. They’re shell-shockingly staid. As such, Britain cannot assume the role of the famous itinerant and go daringly into unchartered bargaining. The role of the piper is taken, without audition, by the non-representative no-nationer Michel Barnier. It is he who stalks us. In this performance, Britain has been downcast to the unwitting and far from innocent town of Hamelin.

A solution: to succeed in these negotiations, we must embrace this new role. We should not think of ourselves as an opportunist individual, one who seeks to scrounge off a hamlet and is willing to sink into moral marshlands in the process (we should have guaranteed national EU citizens’ rights as a point of principal). Instead, we should imagine ourselves as we are: a community at a crossroads in our history. And we must ask ourselves this question.

What happened to the children of Hamelin?

There are two common endings to the Pied Piper of Hamelin. In one, the children are returned unmolested to their parents. In the other, they are drowned like the rats in the Weser River. Which ending will be ours: will we return to the EU, or drown in WTO tariffs? Or, might there be a third ending? As I wrote this piece, I read a copy of The Pied Piper of Hamelin and discovered an untraditional ending which reminded me that the Brexit story is more than just the story of a two-year negotiation. In the last line of this copy, the children of Hamelin are said to: “dance over the hills and far away, to a new land where the people were kind and generous and always kept their promises.” When I read this, I thought that it was a lame ending at first. But, as I thought about it, I saw how little closure this ending gives. It’s actually a bit upsetting – we don’t know whether the children found this land, or if such a land ever existed; and in the same way the parents of the children of Hamelin would have had no closure either, for they must have wondered not only on what could have been, but also on what was. What the reader is really told is that, because of the actions of their parents, the children of Hamelin have embarked upon a new and dangerous future.

We do not know what we will find after Brexit. All we know is that this is a moment of change. For some, this is the promise of utopia. This is a dangerous promise, for utopia is an illusion, and as a country we find ourselves young again, vulnerable, and perhaps the dancing-mania induced victims of demagoguery; but, for better or for worse, we have the potential to mine a future for ourselves in the mountains. ‘To pay-the-piper’ is thought of a moralising proverb – as a reminder to pay those to whom we owe something. In its original proverb form, however, it was: ‘he who pays the piper plays the tune.’ In other words, we should be prepared to set our own terms and be prepared to walk away if they are not met. We should have known from the beginning that we might have to embrace the Grim. After all, they make for the best fairy-tales.