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'You Get Nothing' - Johnson Refuses To Pay Brexit Divorce Bill If No Deal With EU

With this weekend's G-7 Summit in Biarritz winding down UK Prime Minister Boris Johnson confirmed something that has been bandied about in the British press for weeks, if not months:He warned that, if no deal on the withdrawal agreement is struck, the UK would refuse to pay the £39 billion ($47.9 billion) divorce settlement that it's treaty bound to pay. 

According to the FT, ahead of a meeting at the G7 summit in Biarritz with European Council President Donald Tusk, the prime minister said that while the chances of a revised Brexit withdrawal agreement being finalized were "improving," the process remained "touch and go."

Reuters reports that Johnson is planning to pitch Tusk on the possibility that the UK pay up only a small fraction of the money - some £10 billion - if the UK leaves without a deal.

Though a senior French official insisted earlier this week that Johnson's government would be obligated to make the severance payment regardless of whether a deal was struck, Johnson said the UK would not be obliged to hand over a significant chunk of the divorce bill, something that had been agreed upon by his predecessor, Theresa May.

As Johnson sees it, the severance payment is one of the most potent tools that the UK PM has to coerce the bloc into reconsidering the hated Irish backstop, something that Macron and German Chancellor Angela Merkel have both spoken out against (though Merkel has sounded more accepting of working out an alternative solution).

Johnson has promised the people of the UK that the money could be put to much better use on "other priorities" like the NHS, farmers and "other priorities that are important to our people."

Though Johnson was careful to manage expectations, saying that the EU was still firmly insistent on keeping the Irish backstop, he told Sky News there was still an opportunity to strike a deal, given the "change in mood" among EU leaders.

"I think what the entire European Union understands is that if we come out without a deal then...the 39 billion is no longer legally pledged," Johnson told Sky News, when asked if he had told EU leaders this week he planned to withhold the money. 

"As I’ve said many, many times we will therefore on November 1 have very substantial sums available from that 39 billion to spend on supporting our farmers...and indeed for investment in all sorts of areas."

Most of the £39 billion stems from EU budget commitments that the UK had made, but not yet fulfilled, including contributions to EU staff pensions. the EU insists that the UK is still obligated to make the payments. Johnson, unlike his predecessor, has said that the money could be used like a bargaining chip in the negotiations over the backstop.

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