The European Parliament’s committee on financial affairs argued on Tuesday that the UK should “fully cover” the cost of transferring EU agencies from London.
There are two significant agencies in London, namely the European Banking Authority (EBA) and the European Medicines Agency (EMA). The cost of their relocation is estimated as €60bn. The EP committee focused on the EBA, which falls under its competence. The two agencies must leave London before the UK’s exit from the EU in March 2019.
European Agencies in London
Both agencies are located in the Canary Wharf district and have signed long lease-agreements with hefty breakup clauses.
Founded in 2011, the EBA conducts regular stress tests on EU’s financial sector. It is located at London’s Canary Wharf district and it’s lease agreement expires in December 2026. For its lease agreement there is a breakup clause of €3,2 million, Financial News reported in December 2016.
The same principle applies for the EMA that has been operating in London since 1995. The agency is bound by a 25 years lease agreement signed three years ago. With 890 employees and a €322 million budget, the EMA is the biggest EU agency in the U.K. The loss for London is considerable, taking into account that each year over 36,000 experts, scientists, and consultants come to attend its meetings.
Of course, the biggest loss is not on tourism. Britain will see much more high-value jobs lost from innovation in leading industries. At the G20 Summit in China in September 2016, the Japanese government made clear that the EMA was a key reason for Japanese pharmaceuticals to operate in London and if the agency moved they could follow, taking with them R&D funds and personnel.
The European Parliament committee made clear that the European Commission’s Brexit negotiator, Michel Barnier, must pass the cost of the agencies relocation to London.
The method of calculating the Brexit bill has still not been agreed between Brussels and London.
On Tuesday evening Brexit Secretary David Davies admitted to the House of Commons that the UK government and the European Commission have a very different legal position on the issue of the financial settlement and challenged the opposition to make clear whether or not they are prepared to pay €100bn. In his view, the “proper way” to conduct these negotiations includes willingness to be confrontational.
In his view, the “proper way” to conduct these negotiations includes a willingness to be “confrontational.”