UK may pack EU wine, property in bag after Brexit break-up

Britain is planning to claim a share of the EU's 42,000-bottle cellar of wine, cognac and other spirits, its art collection and its €8.7 billion property portfolio as the government gears up to haggle over Brexit with Brussels.

As in any divorce, untangling EU-UK financial affairs is expected to be one of the most difficult parts of the talks. Any exit deal must settle complex liabilities including UK guarantees on €60 billion of Eurocrat pensions and almost €20 billion of European Investment Bank loans.

As it seeks to minimise any financial hit, Britain is eyeing the other side of the EU’s balance sheet, which includes assets ranging from land and office space to dozens of space satellites, the European Parliament’s art collection, the wine and spirits stock – and Margaret Thatcher’s old Conservative party citadel in Westminster. “Of course we will go for the assets,” said one British official involved in preparations.

Art and property

The ratio for divvying up the value of assets is likely to be highly contentious. But on the basis Britain makes about an eighth of net EU budget contributions, its claim would cover about 5,000 bottles of wine, 250 bottles of spirits, €2.25 million worth of art and about €10 million from the book value of the European Court of Justice building.

Much of the financial detail will be handled by Michel Barnier, the former French foreign minister who takes up his post as the commission’s chief Brexit negotiator today.

Market value

The EU’s consolidated accounts from 2015 show property and equipment of €8.7 billion, valued at the price paid when the buildings were purchased, mostly in the 1980s and 1990s. Britain would be expected to press for a survey to find the current market value.

Among these assets are more than 1.6 million square metres of office space in Brussels alone. This includes the Berlaymont headquarters, which the commission leases but presents as an asset in accounts because it can exercise an option to buy the building from Belgium for €1 in 2031.

Most tantalising for Brexiters may be the potential to reclaim 32 Smith Square, the former home of Conservative Central Office. Bought for £26 million and renovated in 2010, the property serves as a base for the commission and European Parliament in Britain. Nigel Farage, former Ukip leader and MEP, still has use of an office in the building. – Copyright The Financial Times Limited 2016