Boris Johnson says he will hold out for a better Brexit deal. Photo / AP
Boris Johnson says he will hold out for a better Brexit deal. Photo / AP
French President Emmanuel Macron has warned Boris Johnson that Britain's economy will be downgraded and plunged into turmoil if Britain withholds a £39 billion ($74.7b) Brexit divorce payment from Brussels.
In his first interview of the Tory leadership campaign, Johnson, a former Foreign Secretary, said he would "retain" the billuntil he achieved a better deal with the EU.
He claimed that withholding the money would be a "great lubricant" to persuade European nations to reopen talks on the Irish backstop and the terms of a future trade deal.
However, a source close to Macron said failure to pay the divorce bill would be equal to a "sovereign debt default", such as that suffered by Argentina.
It would lead to a significant downgrade in the British economy by ratings agencies, causing the value of government bonds to collapse, hitting savers and investors, including insurance companies and pension funds.
The source said: "Not honouring your payment obligations is a failure of international commitments equivalent to a sovereign debt default, whose consequences are well known."
There was similar concern about Johnson's comments in Brussels, where senior figures warned that defaulting on Britain's divorce bill would be unacceptable.
Guy Verhofstadt, the European Parliament's chief Brexit negotiator, said: "This would not only hurt the UK's credibility as an international partner but it is absolutely unacceptable and contradicts what almost every lawyer in the UK thinks about it."
Johnson argued that the divorce bill would prove to be a "great solvent". He said: "Our friends and partners need to understand that the money is going to be retained until such time as we have greater clarity about the way forward.
"I always thought that it was extraordinary that we should agree to write that entire cheque before having a final deal.
"In getting a good deal, money is a great solvent and a great lubricant."
A significant part of the bill covers commitments to the existing EU budget which runs to the end of 2020. The remainder is made up of payments that Britain has signed off as a member state but which are still to be spent, such as EU pension liabilities.
Johnson added that Britain must leave the EU by October 31. "We must get Brexit done by October 31 or face the real risk of a Jeremy Corbyn [Labour] government," he said.
Jeremy Hunt, the Foreign Secretary and a rival leadership candidate, criticised Johnson for planning to leave with or without a deal by October 31.
He told The Sunday Times: "I don't think anyone can sensibly say now what choices they would take when they've got absolutely no idea what choices are going to be on the table."
Shock at drug use
Michael Gove. Photo / AP
Michael Gove's former flatmate has said he is as "surprised as anyone" to learn Gove had taken cocaine, amid claims the Conservative Party leadership candidate had led a double life.
Gove is the third candidate seeking to replace Theresa May as Tory leader who has admitted to taking drugs.
Jeremy Hunt has said he drank a "cannabis lassi" and Rory Stewart said he admitted to smoking opium.
Gove's ex-flatmate said Gove had been an industrious, diligent journalist who back in the 1990s had no spare time to take cocaine.
But other sources suggested Gove had become attached to a wealthy Tory social set that spent long nights in casinos and nightclubs in Mayfair where he was renting a flat.
Gove has confessed to taking cocaine on "several occasions" during the late 1990s before he entered politics. He made his admission ahead of the publication of a biography which alleges he owned up to using cocaine when being "put through his paces" by advisers during the 2016 Tory leadership contest.
Ivan Massow, Gove's former flatmate, who is now a multi-millionaire financier and a leading gay rights campaigner, said: "I never saw him use anything. This is as much of a surprise to me as anybody else."
