UK’s wishful thinking on Germany

Hope springs eternal in the Brexit breast. Some UK government ministers are speculating that Germany’s September 24 parliamentary elections could be the magic moment that paves the way for a breakthrough in the Brexit talks.

They hope the new government in Berlin will persuade its EU partners at a Brussels summit on October 19-20 to open formal negotiations with London on the post-Brexit EU-UK relationship. This is the fervent wish of Theresa May’s government, which impatiently awaits the day when the Brexit talks turn from the road out to the road to new arrangements.

The ministers also hope that Germany’s next government will look favourably on London’s proposals for the long-term EU-UK relationship. These envisage a partnership that is close but, as far as possible, liberates Britain in legal and economic terms.

The ministers see a chance that their hopes will come true if Angela Merkel, who is on course for a fourth term as chancellor, forms a new coalition government: not with her present partners, the Social Democrats, but with the liberal Free Democrats. The FDP, traditional partner of Ms Merkel’s Christian Democrats, won no seats in Germany’s 2013 election, but is set to re-enter the Bundestag next month with just under 10 per cent of the vote.

The FDP does indeed harbour pro-British sympathies. In a recent interview, Michael Theurer, a senior FDP politician and European Parliament member, explained that he would welcome a reversal of Brexit, although it was a remote possibility. As for Christian Lindner, the FDP’s leader, he is adamant that the final EU-UK deal must protect Britain’s strength and prosperity.

To some extent the FDP holds these views because it is close to the business world. The FDP knows that some German companies and business associations are starting to worry about the lack of clarity over what will happen in March 2019, when the UK’s EU withdrawal is to take effect.

Nonetheless, UK ministers who pin their hopes on Germany are succumbing to wishful thinking. Ms Merkel is no more likely to do favours for Mrs May than she did for David Cameron before the UK’s June 2016 referendum. Like most German politicians, she views the EU as an organisation whose success depends on proper observance of its rules and procedures. The British pastime of cherry-picking in Europe is verboten.

Besides this, Ms Merkel’s priorities are to work with Emmanuel Macron, France’s president, on the EU’s future; to contain Europe’s refugee and migrant crisis; and somehow to try and handle Donald Trump and Vladimir Putin, the US and Russian leaders.

For Ms Merkel, Brexit should be parked, for the most part, with the European Commission and Michel Barnier, its chief negotiator. She and the other EU27 national leaders gave him a detailed mandate to conduct the talks. There is very little room to modify it.

Rather than placing hopes in Ms Merkel or the FDP, London would do better to heed Mr Barnier’s tweeted warning on Monday that talks on long-term EU-UK ties depend on progress on citizens’ rights, Ireland and, above all, Britain’s so-called “divorce bill”.

For the UK to have any chance of a positive decision at the October summit, it will have to achieve some progress with Mr Barnier when the Brexit talks resume next week in Brussels.

Further reading

ECJ proposals 

FT View

Mrs May’s government will need to do some serious fudging of its ECJ red line if it is to build the close economic relationship with the EU it professes to want.

David Allen Green (FT)

The white paper is mostly a discussion document. It offers no solutions, only options. And, tellingly, none of those options is consistent with a “hard” Brexit of removing the ECJ’s role completely.

Philip Stephens: The hollow ring to the Brexiters’ Rule Britannia. Giving up influence in Europe will not enhance the UK’s standing elsewhere. (FT)

Students’ economic impact Amber Rudd orders a probe of foreign students’ role in the UK economy. The Office for National Statistics admitted this week it had underestimated how much they pay in tuition fees to universities and colleges by up to £2.1bn a year, and last month called “potentially misleading” estimates that 100,000 stay illegally in the UK annually after their courses have ended. (FT)

Compliance rules underplayed Government proposals on goods trade only cover the first few weeks after Brexit. (UKTPO)

Green lining Low-carbon services can enhance UK’s post-Brexit economy (LSE Brexit blog)

Hard numbers

Net migration to the UK has fallen sharply following last year’s Brexit vote, as more EU citizens left the country and fewer people arrived from overseas to seek work. In the year to March 2 net migration to the UK was 246,000, according to official estimates released on Thursday. This was down from 327,000 in the year to March 2016, although only a slight decrease from the figure recorded in the calendar year 2016.

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