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James Crisp @JamesCrisp6
, 12 tweets, 3 min read Read on Twitter
UK credit rating at risk if it fails to pay Brexit bill. UK gov source confirms threat is a bluff. But Brussels thinks it is all for the domestic audience. A dangerous game w/ repurcussions for Global Britain & trade
Latest from me @Annaisaac & a thread…
Moody's told Anna that welching on the bill would shred UK credibility and that damage is already being done to investment and trade prospects. This was after Dominic Raab's op-ed 2/…
A senior UK gov source told me the threat was part of a game of chicken to convince the EU we were serious about no deal.
“Not paying a penny is not realistic,” the source said, “All the stuff you are hearing is about frightening the Commission,” 3/ “
"The idea is the EU will think: 'F*** me they’re serious; we need to find a compromise.'
“The plans need to be fully fledged to the point it could happen in order to avoid it to happen. It’s like a nuclear arsenal that stops mutually assured destruction." 4/
BUT the EU doesn't seem to be listening. One senior EU diplomat said Raab's threat was for the Brexiteers at home and not the commission. The EC of course has had its own no deal preparations to ramp up pressure. 5/
So both sides are trying to convince the other that they are deadly serious to force a compromise. What could possibly go wrong? My source guestimates UK would still pay about half of the bill even in no deal./ 6/
And what would happen if there was a no deal? What EU country would sign a mini no deal deal with Britain without the bill?
EU countries would channel Margaret Thatcher and chorus "we want our money back" 7/
It is true that if the withdrawal agreement falls so does the 39billion bill but UK could expect to be pursed for its liabilities under international treaty law.
And as one source pointed out - who will do deals with a Global Britain that doesn't pay its bills" 8/
Colin Ellis of major credit ratings agency Moody’s told The Daily Telegraph that any failure by a country to pay what it had promised “with 100pc clarity” could be considered a default. 9/
UK government source says “As long as it looks like the UK has played a straight bat and not just buggered off, the fallout can be contained, the source said. "As for credit rating agencies, they would probably downgrade both the UK and EU anyway. It cuts both ways.” 10
A quick reminder EU has always maintained that the Brexit bill was settling of past accounts but I understand that UK will not pay membership fees up to 2020, as promised, if there is no deal.
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