What You Need to Know About the Brexit Bill

U.K. and European Union negotiators have reached an outline deal on the Brexit divorce bill the country will pay when it leaves the bloc, one of the key obstacles in their talks. Though the plan still needs the approval of EU member states, U.K. Prime Minister Theresa May is expected to present the offer on Dec. 4 when she meets European Commission President Jean-Claude Juncker. The EU was asking for at least 60 billion euros ($71 billion), while the U.K. has never put a number on it. EU officials have long said that any final figure would be camouflaged to help the U.K. government sell the unpopular settlement to skeptical voters. But why is there a bill at all?

The basic argument is that Britain signed up to spending when it was a member of the club and those liabilities don’t disappear when it leaves. Juncker likens it to ordering a round of drinks and then walking off without paying your share. Firstly there’s Britain’s share of the current EU budget. The spending plans go in seven-year cycles so this one runs to the end of 2020 -- almost two years after Britain leaves the bloc in March 2019. This is the relatively easy bit: May said in September that the U.K. would continue to pay into the budget for two years after leaving in return for continued access to the EU’s single market during that time. That would mean about 20 billion euros. But there is more.