Britain could potentially withhold some payments to the European Union if a deal to help the country leave Brexit doesn’t happen before next year.
As part of a Brexit transition deal, Britain is set to pay the EU between 35 and 39 billion euros ($41-$46 billion) over the coming decades. The country is due to leave the bloc in March 2019.
But Brexit Secretary Dominic Raab on Wednesday (Aug. 29) told members of Britain’s upper house of Parliament that not all of the payments were a legal obligation, and that the country could actually delay sending funds without a deal.
“I don’t think it could be safely assumed on anyone’s side that the financial settlement that has been agreed [on] as part of the withdrawal bill would then just be paid, in precisely the same shape or speed or rate, if there was no deal,” he said, according to Reuters.
Last month, Brussels rejected the U.K.’s proposals on how to govern London’s access to the European market after Brexit, saying that British Prime Minister Theresa May’s latest plan would take away the EU’s “decision-making autonomy.”
The U.K. government had published a 98-page whitepaper that detailed plans for an enhanced “equivalence” model, which would build on an existing system that countries like the U.S. and Singapore use to simplify their access to the bloc.
The U.K. whitepaper called for equivalence to be “expanded,” adding that it was “not sufficient to deal with a third country whose financial markets are as deeply interconnected with the EU’s as those of the U.K. are.”
But sources said that Michel Barnier, the EU’s chief Brexit negotiator, told ministers that the plan would undermine the EU’s stance that equivalence decisions must be made unilaterally by Brussels, adding that it would amount to a “system of generalized equivalence that would in reality be jointly run by the EU and U.K.”