Are Germany and France Trying to Get the UK to Rescind Brexit?

June 15, 2017 11:15 AM
Photo Credit: 
REUTERS/Fabrizio Bensch

Bolstered by his likely parliamentary election victory on Sunday, President Emmanuel Macron of France appears poised to join with the increasingly formidable Chancellor Angela Merkel of Germany to launch a new drive for European integration in the coming years.

If—or rather when—that happens, the British confusion over how to proceed with negotiations to exit the European Union will take on an entirely new dynamic, weakening Prime Minister Theresa May’s negotiating position to the point of near paralysis.

So far, most analysis of the UK election has been about what it will do to the UK position in the Brexit negotiations. By undermining any claim of strong leadership for May and compelling her to rely on an untested regional Northern Irish fringe party for her parliamentary majority, the election will have greatly weakened the United Kingdom at the negotiating table. Representatives of a minority government cannot make truly credible political concessions or engage in any quid pro quo in negotiations with other countries.

The new cloud over Brexit occurred, ironically, after an election in which Brexit was absent as a campaign issue, in part because the Labour Party supported May’s “hard Brexit” strategy of quitting the European Union without a deal on retaining access to the EU Internal Market or preserving the internal mobility of European citizens. The only really big issue up for discussion would seem to be the United Kingdom’s continued membership in the EU customs union. Remaining a member would make the Irish border question much easier to settle, potentially eliminating the need for any customs clearing at the border and ease any related concerns of Northern Ireland's Democratic Unionist Party.

However, this would also deny the United Kingdom the option to strike any new trade deals on its own, eviscerating the Conservative Party vision of a post-Brexit “Global Britain.” It is hard to imagine that a weakened prime minister could sell such an additional policy U-turn to her own party. Challenging as these problems are, they are made worse by the deceptively tough and cunning negotiating position by the remaining 27 European Union (EU-27) members. Rumors of secret talks between pro-EU Conservative and Labour members of parliament about a pact to secure a softer Brexit look fanciful, moreover, in light of the pledge by Labour leader Jeremy Corbyn to keep his party on a permanent campaign footing in the expectation of another early election soon.

London will be no match for a politically reinvigorated Franco-German alliance marshalling the considerable skills of the European Commission.

The United Kingdom will enter the Brexit negotiations unprepared technically and deeply split politically. London will be no match for a politically reinvigorated Franco-German alliance marshalling the considerable specialist skills of the European Commission.

The rest of the European Union is certain to stick to their sequenced negotiating mandate. As a first priority, they will demand a settlement of the financial issues related to Brexit and any issue related to the rights of EU and UK citizens. It is unclear whether a weakened British prime minister can deliver enough concessions to move the negotiations past this first stage. Hopefully the UK government will, as I advocated earlier, move immediately to settle the issue of citizens’ rights to kickstart negotiations in a constructive manner.

There is nothing in the EU-27 position led by France and Germany that suggests they will be anything other than extremely tough negotiators. And without quick progress also on the money issue, a decision point will quickly be reached where May will have to decide whether to walk away from the negotiations or essentially concede to the European Union’s demands in return for an open-ended transitional arrangement that would amount to a more or less intact status quo after the Article 50 deadline expires in early 2019.

The Franco-German axis is less troubled by a “no deal scenario” than many in London (and outside the European Union) appreciate. Yes, the EU-27 would certainly like to maintain close foreign policy, antiterror and defense relations with the United Kingdom. And yes, they would like to avoid the economic dislocation from a “no deal” Brexit that cuts the United Kingdom off from economic relations. But the EU-27 economy is strong enough to welcome a push for additional EU (and euro area) integration, unimpressed by May’s threats to walk away.

The Franco-German axis is less troubled by a “no deal scenario” than many in London appreciate.

Germany and France have every incentive to get negotiations started quickly while maintaining their hardline negotiating stance. An early breakdown in Brexit talks would likely cause an additional economic shock in the United Kingdom, and one that could not be immediately alleviated through monetary and fiscal easing to boost consumer spending. A resulting loss of consumer confidence, already hurt by falling real wages, would potentially crumble further, producing demands for a new Conservative leadership election and general elections. Merkel and Macron might not mind that scenario out of hopes that a new Conservative leader or even Corbyn could be a more realistic Brexit negotiating partner.

The recent statement by German finance minister Wolfgang Schäuble—repeated by Macron—that the European Union’s door is open if the United Kingdom changes its mind on Brexit, must be seen as a veiled threat that the European Union’s hardline negotiating position won’t change no matter what. Today, such a softly spoken challenge probably invites scorn and chest-banging by the Tories and their allies. But if economic turmoil continues, and as the Article 50 deadline for reaching a deal comes closer, the British public could come to appreciate the option to remain in the European Union after all. It is, as Martin Wolf has recently pointed out, democratically legitimate to demand another referendum to decide between remaining in the European Union and a specific Brexit, especially if the latter is a truly dreadful “no deal scenario.” Forcing another referendum to potentially undo Brexit appears to be what Schäuble has in mind, when he is silent on any soft (e.g. a la carte) Brexit but emphasizes EU openness to a reversal.

We have seen this movie before, after all. When Greece threatened to quit the euro area in 2015, France and Germany played hardball and won. They will not have forgotten that lesson. Prime Minister May, humbled by her disastrous election debacle, might want to improve her performance in office and brush up on recent history to avoid becoming the new Alexis Tsipras—prime minister of a small European country but without the power to change its destiny.