Emmanuel Macron has warned Boris Johnson that his plan to withhold £39bn Brexit divorce payment would be a sovereign debt

French President Emmanuel Macron has warned ominously that Boris Johnson's threat to withhold the UK's £39bn 'divorce bill' payment from the EU could be treated like a sovereign debt default.

Emmanuel Macron has warned Boris Johnson that his plan to withhold £39bn Brexit divorce payment would be a sovereign debt
Emmanuel Macron warns Boris Johnson of his plan to withhold £39bn Brexit divorce payment

Emmanuel Macron warns Boris Johnson that his plan to withhold £39bn Brexit divorce payment would be a sovereign debt default with DIRE consequences for UK economy

French President Emmanuel Macron has warned ominously that Boris Johnson's threat to withhold the UK's £39bn 'divorce bill' payment from the EU could be treated like a sovereign debt default.

Nations which do not repay money they have borrowed - those which default on their sovereign debt - are punished by international markets.

A debt default leads to devaluation of the currency, an increase in the price of servicing national debt, and a lower national credit score - although it is unknown whether the international financial markets would respond in line with historical precedent in this case.

It comes after Boris Johnson vowed to deliver Brexit and keep hold of the £39billion divorce payment from the EU unless better exit terms are offered - as he insisted only he can defeat Labour and the Brexit Party.

The leadership campaign front-runner pleaded with Conservative MPs and members, saying he would be prepared to refuse to pay the promised £39 billion to the European Union - and would step up preparations to counter no-deal 'disruption'.

'I think 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,' Johnson told the Sunday Times. 'In getting a good deal, money is a great solvent and a great lubricant.'

But a source close to French President Emmanuel Macron countered that failure to pay the Brexit bill would be equivalent to a sovereign debt default.

'Not honouring your payment obligations is a failure of international commitments equivalent to a sovereign debt default, whose consequences are well known,' the source said.

The European Parliament's chief Brexit negotiator, Guy Verhofstadt, also responded with something approaching alarm, tweeting: '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.'

Another senior Brussels figure said that any attempt by Mr Johnson to withhold payment would put the 'credibility of the UK as a sovereign signature' into doubt, the Sunday Times reported.

 The revelations come as the Sunday Times reported that the first time Donald Trump tried to call Boris Johnson recently he assumed it was a hoax.

Johnson said someone with a mild Irish accent had called him claiming to be from the Downing Street switchboard, saying they would put him through to the White House situation room.

The Tory frontrunner said: 'Thinking quickly as I do, I said, 'To all our listeners on Radio Kilkenny, I was not fooled for an instant'.'

Leadership rival Michael Gove set out plans to replace VAT after Brexit with a 'lower, simpler' sales tax.

And Sajid Javid's campaign received a boost with an endorsement from Scottish Tory leader Ruth Davidson.

In his first major interview of the campaign, Mr Johnson told the Sunday Times he could defeat the twin threat posed by the leaders of the Brexit Party and Labour - comparing them to the sea monsters from Greek mythology which troubled Odysseus.

'I truly believe only I can steer the country between the Scylla and Charybdis of Corbyn and Farage and on to calmer water.

'This can only be achieved by delivering Brexit as promised on October 31 and delivering a One Nation Tory agenda.'

Mr Stewart said it is 'very encouraging', but he cautioned there are 'many steps still between here and Downing Street'.

As Theresa May resigned as Tory leader on Friday, the starting gun was fired for the race to replace her.

The nomination process will take place on Monday, with candidates requiring eight MPs to back them in order to enter the race, with the first round of voting on Thursday.

Source: Daily Mail