The Financial Settlement
This chapter explores the provisions of the Withdrawal Agreement on the financial settlement — the money the UK shall pay to the EU in connection to its departure. The financial settlement for the withdrawal of the UK from the EU posed numerous challenges to both parties. For the UK, internal divisions in the ruling Conservative party made it difficult to develop a coherent position. On the one hand, Brexit hardliners saw continued contributions to the EU budget after Brexit as a betrayal of the referendum result. On the other hand, the so-called Remainers favoured maintaining close relations with the EU and paying to ensure access to its markets and various programmes. For the EU, Brexit threatened the budgetary agreement that had been carefully negotiated in the context of the 2014–2020 multi-annual financial framework. Moreover, the exit of the UK from the EU ushers in a new era. Because the UK was, despite its rebates, one of the largest net contributors to the EU budget, Brexit could impair the EU’s ability to finance some of its traditional programmes or to expand into new areas.