In our post-Brexit world, there are some key figures that will strongly influence the outcome of the negotiations. One of them is Jean-Claude Juncker, the head of the EU Commission, a seasoned EU-politician who made us laugh earlier this week when he asked Ukip-leader Nigel Farage why he attended a session of the European Parliament, given that he was one of the driving forces behind the Leave-campaign.
Juncker did not speak English during that session and made sure that none of his staff or that of other EU-bodies enters any preliminary talks with the British before Article 50 of the Lisbon treaty has officially been triggered. According to Juncker, there “can be no preliminary discussions”. Since the referendum vote last Thursday, Juncker has played hard-ball. As the leading EU-representative, he is obviously not just angry about the British vote to leave but also afraid that it could lead to contagion among other dissatisfied EU-member states. The last thing that Juncker wants to see happening is more countries following the British example.
Then there is Francois Hollande, the French President who will face a general election next year and who has promised to not seek reelection should the unemployment rate stay at where it is. For Hollande, Britain’s vote for Brexit is a dangerous affair. After all, Mr. Hollande has a Ukip-like party in his home country as well, called Front National, a party that has been around since the early 70ties and that has gained some support by voters during the last years.
With France’s economy continuing to suffer and the population resisting reforms, their leader Marine Le Pen offers even more drastic solutions to the country’s problems than Nigel Farage in the UK. It is precisely this why France is relatively harsh towards the UK – to send a message to voters at home that populism does not lead to great results. Thus, the head of the French Central Bank declared over the weekend that UK banks will lose their passporting rights that currently allow them to trade in Europe should the UK leave the EU.
This week, President Hollande delivered a second blow by stating that the City of London would be losing its right to conduct Euro-clearing should the country separate from the EU. According to the FT, he said: “It can serve as an example for those who seek the end of Europe . . . It can serve as a lesson.” Thus, we can assume that France will – for domestic reasons – take a ruthless stance in the divorce talks.
Besides Juncker and Hollande, there is – of course – Angela Merkel, the German chancellor. Also in this crisis, Merkel has followed her previous success recipe. In Germany, we have gotten to know her for only taking sides and positioning herself once all or at least most of the other parties have voiced their opinion. It’s a strategy called “merkeln” that Merkel mastered during her early years in the Christian Democratic Union (CDU), at the time a hugely male-dominated club of guys that ran the show. By waiting them out, Merkel was over time able to gain control over the party.
Even when she became Chancellor, Merkel stuck to her strategy. On numerous occasions, we have seen it played out, both on the domestic but also the international front. No surprise then that it also came into play when Merkel started talking about the consequences of the British Brexit-vote. On Friday, just hours after the announcement of the result, Merkel warned against drawing “easy and hasty conclusions”. On Sunday, she said she would not “push for an immediate withdrawal”.
But before the European Summit on Tuesday, Merkel changed her tone. According to the FT, she said: “We will ensure that the negotiations will not be run on the principle of cherry-picking,” the Chancellor said. “We must and will make a palpable difference over whether a country wants to be a member of the family of the European Union or not. Whoever wants to get out of this family cannot expect that all the obligations fall away but the privileges continue to remain in place.”
To me, this was a clear sign that Merkel has synchronized her attitude towards the British question not only with fellow Christian Democrats such as Finance Minister Wolfgang Schäuble (“In is in. Out is out”), but also with her European allies. Even if we hear conflicting messages out of Brussels, the Leave-side should not take this too serious. Yes, there are different positions on how the EU should deal with the British exit but leading figures such as Merkel, Hollande or Juncker will make sure that there is a unified position in the end.
Instead of reading the tea leaves in Brussels, the British side should focus more on making up their mind and defining what kind of relationship they want with the EU. Unless they have reached that stage, there is no point in bowing and scraping in various European cities. Until Article 50 is triggered, the UK will not be able to strike any agreements with the EU, even if Merkel continues stating that there is no need to be particularly nasty towards the Brits.
Whoever succeeds David Cameron should not rely solely on comments made by German industrials like Markus Kerber, the head of the BDI, the equivalent to the CBI. Just because Kerber warned against trade curbs between the UK and Britain, this does not mean that this position is widely shared by decision makers. For Merkel and other Europeans, there is more at stake here than trade.