The second important consequence of Brexit is that all students in the EU/EEA and Switzerland will no longer be able to apply for student loans from 2021. These rules apply to consumer credit of between EUR 200 and EUR 75,000, with the exception of loans: in the meantime, the withdrawal agreement allows other Member States to increase the UK`s guarantee on loans taken out to replace Member States` cash deposits. In other words, the UK will guarantee what it does not learn in cash. The UK should be concerned about the continued continued shared and multiple responsibility of the funds and guarantees that will be spent under this multi-year financial framework (MFF) and previous funds and guarantees under the EU`s budgetary commitments. These are already two important funds: the European Financial Stabilization Mechanism and the Balance of Payments Mechanism, totalling EUR 110 billion, of which EUR 61 billion is currently not in use and are available in opaque circumstances, that is, which give the EU authorities sufficient leeway to create a plausible reason to meet current needs. In addition, there are two important guarantees, both for the European Investment Bank (EIB): EIB loans outside the EU and EIB loans within the EU under the European Fund for Strategic Investments (EFSI). It is not clear whether the United Kingdom will further guarantee subscriptions under these funds/guarantees, which were made until March 2019, or until the end of the current MFF in December 2020, the controversial end of the transition period. The “comfort” of the transition date, which ends on the expiry date of the current MFF, reinforces the belief that the UK will be the guarantor of all EU commitments at the right time. In this case, the United Kingdom should be particularly cautious on two points. First, all unused parts of existing funds or guarantees will be cancelled from December 2020 and will not be transferred to the next PSC for the draw, so the risk to the UK will continue to increase in 2021 and beyond.
Second, there is a very large part of the commitments under the current PSC that has not been used, that is, it is not intended for a fund or a guarantee. When we looked at this for the Bruges group before the Brexit referendum, we calculated (and this is not an exact science because of the mass of DATA from the EU, but the lack of concise answers to the most obvious questions) that the EU could create new commitments by 31.12.20, without the need to predict use, as is the case for payment credits (the cash budget). The cash budget amounts to 0.97% of EU GNI per year and applies individually for each year without the transfer of unspent amounts. New resources/guarantees can be used by qualified majority in a Council of Ministers (all Prime Ministers or Finance Ministers) and a similar procedure is needed to agree on programmes, to use existing funds (but no guarantees granted by the EIB, which decides to make a loan outside the EU or to finance an EFSI project). The current funds have some flexibility. The UK`s liability is about 12%, which experts say could amount to up to $160 billion in unpaid loans, four times more than the UK`s $39 billion divorce deal. The withdrawal agreement sets out how the UK and the EU will pay off their unpaid financial obligations arising from the UK`s participation in the EU budget as a member state and the wider aspects of its EU membership. The agreement on these financial aspects is known in the financial settlement (regulation).