August 02, 2018
Remain campaign in state of panic over possible Brexit deal
It took a while for the slowly emerging news about a more constructive phase in the Brexit talks to register in the UK, where commentators are still hyperventilating about a no-deal Brexit or a second referendum. The Guardian reports this morning of sheer panic in the Remain campaign amid reports that Germany is more open towards a soft-Brexit deal. Germany has officially denied the crude version of its diplomatic shift - it has clearly not given any instructions to Michel Barnier. But there is a notable difference in approach, as Berlin clearly has no interest in a no-deal Brexit whose probability has risen.
As we have been writing, the Remain campaign does not want a soft Brexit but a second referendum. The compromise the EU is now considering is a rather short and vague political declaration about the future relationship. The declaration was never going to be legally binding in any case. The EU knows fully well that a change of government after Brexit would clearly have an impact on the future negotiations about an association agreement. This is why the EU can live with some degree of constructive ambiguity right now. The overall goal on both sides is to avoid a no-deal Brexit. As the prospects for such a calamity fade, so would the prospect of a second referendum. The article said the Remain campaign had relied on Germany and France keeping a tough line on the future relationship. There is fear that a vague statement about the future relationship may even entice some Labour MPs to support the deal.
The article says that the Remain campaign entertains no systematic diplomatic contact with other EU governments, which is why they may not have registered Merkel’s subtle diplomatic shift. The campaign relies mainly on private contacts by Nick Clegg or Tony Blair. We noted that the campaign has already coined a term for what is likely to be agreed: a blind Brexit. We also thought it was interesting that they want to get EU leaders explicitly to keep the door open to the UK remaining in the EU. Apart from Donald Tusk, who keeps on making this invitation, we are not hearing this from either Angela Merkel or Emmanuel Macron. Merkel’s line is that she regrets the decision but accepts it.
Alex Barker has some wise words to offer about the apparent shift in Merkel's position. There is a subtle shift, but a shift nevertheless. We would add that Merkel’s style of government over the last 13 years has been to kick the can down the road. Why expect a change over Brexit? Germany has an interest in the approval of a soft withdrawal deal. And this means Germany is closer to May than to the Remain campaign.
We also agree with Barker’s suggestion that Merkel’s change of position may be informed by shifts in geopolitics. Merkel is currently battling on too many fronts. The last thing she needs now is a hard Brexit. Of course, Germany is not willing to sacrifice the integrity of the single market. But we don’t think that this will be necessary.
We also noted an interesting story by George Parker in the FT about Michael Gove’s backstop plan in case parliament refuses to ratify the withdrawal agreement. This is similar to a proposal by Lord Owen, the former foreign secretary, who had proposed time-limited membership of the EEA - one that takes us beyond the next election. We should note this is not a proposal, merely something that has been discussed over dinner. We would agree that temporary EEA membership as a backstop solution is plausible as it would clearly be acceptable to the EU. It can be negotiated quickly, possibly with a small, but limited Art. 50 time extension.