EU’s ‘Arrogance’ Could Cost Them Millions

COULD the EU’s hasty post-Brexit decisions now be costing them millions?

Confidential documents have revealed a potential financial burden for the European Union, currently estimated at £27 million.

The problem centres around an unoccupied office space in London, as a direct consequence of post-Brexit decision-making.

Reportedly the expense could escalate to a staggering £370 million. The property in question is a 280,000-square-foot office at 30 Churchill Place, Canary Wharf, previously occupied by the European Medicines Agency (EMA).

A Costly Lease And Unforeseen Consequences

In 2011, the EMA committed to a 25-year lease valued at £500 million, a decision made well before the decisive Brexit referendum in 2016.

After Brexit, the EMA moved its 900 staff members to Amsterdam and sublet the property to US company WeWork in 2019. However, after WeWork’s bankruptcy filing in November 2023, concerns have arisen about the future rent payments for the building.

The European Parliament’s budget committee was notified that WeWork’s UK branch might cease rent payments soon. If unoccupied for the remaining year, the EU faces a £27 million expense, impacting the EMA’s budget.

At the moment, MEPs are deliberating over covering the first three months of 2024, totalling £4.55 million.

Decision-Making Under Scrutiny

Frank Furedi, Executive Director of MCC Brussels, criticised the EU’s decision-making, stating, ‘EU taxpayers are on the hook for millions of Euros because of bad decisions by EU agencies.’

He went on to highlight the lack of a lease exit clause as a major oversight and criticised the EMA’s ‘arrogance’ and ‘incompetence.’

In contrast, a WeWork spokesperson maintained that they are meeting their lease obligations at 30 Churchill Place. They emphasized ongoing negotiations with their landlord for a mutually beneficial solution.

The EMA spokesperson clarified that WeWork’s Chapter 11 bankruptcy protection, filed in November 2023 in New Jersey, USA, pertains only to its US and Canada branches. WeWork continues to operate in London and fulfills its financial commitments.

As the lease runs until June 2039, the EU could be liable for £373 million in rent unless a long-term resolution is found.