Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Advice for the British and German leaders on navigating the Brexit mess

Posted by hkarner - 28. Juli 2016

Date: 28-07-2016
Source: The Economist: Charlemagne
Subject: Correspondence club

May Merkel reading lettersDEAR THERESA,

At your first cabinet meeting you said that your government would not be “defined by Brexit”. Good luck with that. Britain’s tortured relationship with the European Union has felled most recent Conservative prime ministers, and none faced a task remotely as daunting as the one that confronts you. Disentangling Britain from the EU will be like extracting one glue-slathered octopus from a basket of 27 other ones. It could go horribly wrong.

To avoid that, Charlemagne offers some unsolicited advice. You begin with a reservoir of relief (not goodwill, mind) among your fellow European leaders. Disaster would now be looming had an outlandish Brexiteer such as Boris Johnson muscled his way into Downing Street. You earned respect in Brussels during your six years as home secretary. But that also means that while your EU counterparts may ignore the boosterish bluster emitted by some of your more excitable cabinet colleagues (such as Liam Fox, the new trade secretary), they will expect better from you.
So choose your battles carefully. Do not, for example, dither endlessly on Article 50, the legal device which sets a two-year timetable for quitting the EU. The EU is sick of crises and wants as smooth an exit path for Britain as possible. You will need friends if you are somehow to maintain British banks’ access to the EU market while limiting the right of European workers to move to Britain. Your government is not supposed to conduct trade talks with third parties before Britain has left the EU, but your partners may wink at Mr Fox’s globetrotting if you have earned their trust.

Do your homework on other countries’ domestic politics, for they will complicate your talks. One year from now, for example, your French interlocutor might be not François Hollande but the more obstreperous Nicolas Sarkozy (or even the ghastly Marine Le Pen). Italy might have tumbled into political and financial chaos. So listen to your diplomats. Tour the capitals. If you can bear it, address the European Parliament; MEPs must approve whatever post-Brexit deal you strike, and they adore the attention. And a tip for EU summits: do not say one thing to your fellow leaders inside the room and then the opposite in public. As Mr Cameron can attest, they really, really hate that.

You must expect a fair bit of scrutiny yourself. Some in the EU fear you have staffed your court with jokers and knaves (many were incredulous at your decision to appoint Mr Johnson foreign secretary). Prove them wrong. Ignore advisers gleefully predicting another euro crisis that Britain can exploit; placing bets on imminent disaster is not the way to win friends. And immediately fire anyone who speaks of using Britain’s “security surplus” as a bargaining chip. Britain backs EU and NATO military missions on their merits, not because they may help win sweet trade deals.

Some decisions must be made quickly, including whether temporarily to opt in to Europol, the EU police agency that Britain has done so much to support. You should, if only to figure out how to maintain access to its databases after Brexit. Foreign policy should prove a little easier. Britain’s diplomatic expertise, military might and aid budget are valued in Europe, and few in Britain see much point in cutting all foreign-policy ties. (Ignore those who do.) Finally, keep your eyes on the prize. The next two years will involve hard talks, late nights and tough calls. If they go badly, what follows could be far worse.

LIEBE ANGELA,

Three British prime ministers have come and gone during your time in the chancellery. Your renowned reserves of patience will be needed to manage the fourth. Mrs May’s rapid ascent to power masks deep dysfunction in her government and party. Howls of betrayal will begin as soon as the Brexit talks do. The ministers she has sacked are brooding on the backbenches, some waiting to exploit her slim majority. The weakness of the opposition Labour Party—which rivals your coalition partner, the Social Democrats, for uselessness—further liberates Tory mischief-makers.

Your trickiest customers could be the “soft Brexiteers”, who will seek complex trade-offs between market access and migration rights that could set awkward precedents for other EU members. (The headbangers would be perfectly happy with the sort of clean break that would make life easier for everybody else.) Do not read too much into Mrs May’s eyebrow-raising appointments: she has party rifts to heal. It may be woeful to see Mr Johnson, a man of no known principles, occupy a great ministry of state. But look on the bright side: he is ideally placed to display the ideological flexibility the Brexit negotiations will demand.

How should you approach the talks? The idea, popular among your advisers, of letting Britain stew in its own juice is not absurd. Spiralling bond yields did more than any political pressure to rid you of Silvio Berlusconi during the euro crisis, after all. And the signs are that the economic pain from Brexit will fall squarely on Britain. A nasty recession, you might think, would encourage Mrs May to seek as broad a trade deal with the EU as possible, even if that means special treatment for its migrants.

Do not take this line of thinking too far. Plenty of people in Britain, to put it bluntly, are prepared to make their country poorer to regain control over borders and law-making. Just look at the referendum result. German exporters have already leant on you to keep tariffs in whatever post-Brexit settlement emerges as low as possible. But they are not your only concern.

For once again, it has fallen to you to hold Europe together after the body blow of Brexit. From terrorism to refugees to Italian banks, there is much to disturb your sleep. An early lesson in what not to do was provided by your foreign minister, who invited his counterparts from the five other founding EU countries (France, Italy and Benelux) for a brainstorm in Berlin just after the referendum. Other governments were furious. Happily, you quickly distanced yourself from this anachronistic nonsense.

But the foreign ministers were right about one thing: this is no time for “mere reflection” inside the EU. No one thinks you and the French are about to get over your differences on how to run the euro. But the EU could do with an eye-catching initiative or two. What about leaning on France to scrap the European Parliament’s much-hated second seat in Strasbourg? Perhaps Paris could be placated with the European Banking Authority, which will have to leave its London home.

Dramatic gestures are not your style, of course, particularly before your presumed re-election bid next autumn. But after you have won your fourth, and presumably final, term, you can afford to loosen up a bit. Britain’s departure will roil the EU, and there is nothing you can do to stop it. But a bit of fresh thinking for the rest of the club would not go amiss.

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