October 19, 2017
Germany is softening up over Brexit
We recall making a controversial argument after the Brexit referendum that Germany will end up supporting the UK in its quest to seek an article 50 agreement. We know that the standard view among commentators in the UK is now that this is not so. Germany will prioritise the single market. This is indeed the official position but, behind the scenes, there are signs of softening, as Bloomberg and Handelsblatt suggested yesterday in separate reports.
Bloomberg reports on a document prepared by the German foreign ministry, which outlines a comprehensive free-trade agreement with the UK. The four-page document is dated October 11, and proposes a broad partnership including at a minimum: foreign and security policy; fighting terrorism; cooperation on criminal justice; agriculture and fisheries; energy; transport, especially air transport; research; and digital issues.
This obviously still falls short on banking and finance - we don't think there will be comprehensive deal to allow the City of London to remain the eurozone's financial centre. But, on many other areas, there is scope for co-operation. The article points out that this does not necessarily represent the position of Angela Merkel, but it nevertheless stakes out an important claim. Continued policy co-operation, especially in the field of foreign and security policy, is a vital German interest. Just recall last week's joint reaction by Germany, France, and the UK, to President Trump's decision not to certify the Iranian nuclear agreement.
Writing in Handelsblatt, Ruth Berschens notes that the German government seemed to have changed its tone on Brexit. Contrary to the official mantra that the talks are deadlocked, the German government emphasises the good degree of progress that has already been achieved, coupled with optimism that the few remaining problems are solvable. What matters a lot more than money are the joint interests about the future. Berschens calls it a message of peace, and concludes that Germany is as interested in a soft Brexit as the UK itself. She points out that logical disruption at the UK seaports and airports would be damaging to both German and British interests.