Britain’s quest for the right point in time

It’s all about timing. This is true for all walks of life: For work, for relationships, for international politics. As you might have discovered yourself, it matters a lot whether you find the right point in time to hand in your resignation. The right point in time to ask your partner if he or she wants to marry you. The right point in time to have kids.

The same goes for the world of business and politics. Timing can be crucial here, as the British have found out since the vote for Brexit. As there is no automatic start to the two year-long divorce proceedings, choosing the right point in time for the beginning of the negotiations might strongly influence the outcome.

This decision – when to trigger Article 50, the critical passage of the Lisbon Treaty – lies solely with the British government. Although they might want to, neither Jean-Claude Juncker, the President of the European Commission, nor the Members of the European Parliament or the 27 other Member States, can force Britain to trigger Article 50.

It’s important to realise that the decision over when to trigger Article 50 is one of the last cards the British government has left to play. It thus made sense that David Cameron, the former Prime Minister, did not trigger it straight away after the – for him – disastrous result of the referendum on the 23rd of June became known (although he had said before he would trigger it straight away). Quite the opposite, he left the decision to his successor.

Coming into office without any detailed plans on how to implement the result of the vote, Britain’s new Prime Minister, Theresa May, has spent the last two months trying to find out what the British position is for a life after the EU. Thanks to the decision in Whitehall not to engage in any prior, in-depth planning for the case of a vote for Brexit, May and her staff, as well the other members of her Cabinet, have found themselves frantically trying to close the gaps before the end of the summer break.

The same is happening on the other side. On Monday, Angela Merkel, French President Francois Hollande and Italy’s Prime Minister Matteo Renzi will meet in Ventotene in Italy. Then, the German Chancellor will head to Estonia and Poland. The goal for this “European Brexit Tour”, as the FT dubbed it, is clear: Coming up with a unified, European position towards Brexit.

Similar to the British, the Europeans don’t have much time left, as there is a big European summit looming which will be held on the 16th of September, in Bratislava. Despite the fact that some leading figures, among them Jean-Claude Juncker as well as Francois Hollande, have demanded the UK to start the divorce talks quickly, it seems that the Europeans have realised that Britain will take its time.

Initially, the autumn or the end of the year seemed like the most feasible time frame for Britain to begin negotiating its exit. Since then, the date has continuously been pushed back: From the end of 2016 to at least 2017. This scenario would give the British government some more time to find out what it wants: The Norwegian model? A Swiss-style agreement? Or maybe no agreement, resulting in a so-called “hard Brexit“? This option would also make it possible to see how the British economy digests the unexpected outcome of the referendum.

Some observers, among them EU-citizens living in the UK, have cherished the idea that Theresa May might kick the ball long into the grass. She could be waiting many more months, even years, they hope, and by that point have waited until the economy is in such a bad state that the electorate might be willing to let go of the idea to leave the EU. This is, of course, pure speculation, as are some of the other theories that are currently being tested.

Then, the Sunday Times made big headlines last weekend by running a story according to which Prime Minister May could wait until late 2017 or even longer before she triggers Article 50. This makes sense, given that both France and Germany will hold national (or federal) elections next year, with very unforeseeable outcomes. With the possibility of both Francois Hollande and Angela Merkel gone before the end of 2017, some more patience might be justified, as a change in government in important countries such as these will definitely influence the outcome of the Brexit-negotiations between London and Brussels.

However, this idea might not go down too well with the “hard“ Brexit-camp, the likes of Brexit Minister David Davis and Trade Minister Liam Fox. Both have campaigned for a quick Brexit in order to radically transform Britain’s relationship with the outside world. Thus, on Friday, there were widespread reports according to which the British government will not wait for the outcome of the French and the German elections before it triggers Article 50, letting the Pound Sterling tumble. From a market point of view, rumours like these are not welcome: The market does not like surprises, it wants ample time to prepare – in order to prevent the worst (In any case, the deployment of Article 50 will result in a heavy sell-off).

To me, it all comes down to how Theresa May squares the circle. How does she reach a common position between soft and hard Brexiteers? Will she manage to align David Davis and Liam Fox, as well as flip-floppers such as Foreign Secretary Boris Johnson? Depending on which position (The Norway model? A Swiss-type agreement? No agreement?) gains the upper hand, May will trigger Article 50 sooner or later. For observers, this will then provide some first insights into what the British government might be after.

Soulsearching

It was an easy question, at least from the perspective of the radio presenter who asked it. “So would you apply for a British passport if this would allow you to stay in the country?” The scene took place Monday early afternoon, at Western House in Central London, right next to Oxford Circus. I had been invited to share some of my experiences as a European in a post-referendum Britain, on the Jeremy Vine Show on BBC Radio 2, and there we were. Right at the heart of the question.

Imagining that the European Freedom of Movement could be restricted or even revoked after a British EU-exit, would I still want to live in this country and, secondly, would I apply for British citizenship in order for me to be able to stay? It´s an interesting thing to think about, especially for me. So far, I have merely seen the outcome of the referendum as an unexpected turn in British history. I have watched the pound crash, Cameron resign, EU-Commissioner Hill step down. Within days, Boris Johnson was knifed, George Osborne dumped his austerity goal and Nigel Farage quit.

As a journalist, I watched it with fascination – seldomly, we get the chance to witness decades happening in a couple of days – but I haven`t really contemplated on what all this means for me personally. I have been in the UK for three years now (four if you count the year that I did at the London School of Economics in 2011) and I always liked it here.

I find it disappointing that a country with so much potential is now slowly dismantling its reputation in the world, its relevance as Europe’s leading financial center, its relationship to Europe. Of course, from a journalist point of view, this is as exciting as it gets. But from a personal perspective, do I still want to be here?

The huge amount of racist incidents since the referendum has clearly not helped. These days, you watch videos in which Brits are telling Europeans to leave their country. You read about insulting behaviour on trains and trams, in streets and restaurants.

The more worrying to me though is the debate about Europeans living in the UK and the question of whether they will be allowed to stay, should the UK really trigger Article 50 and sever its ties with the EU. For a long time, we were told (and happily believed) that nothing would change for those who are already in the country, that there would possibly be grandfathering of those arriving between now and the formal exit.

However, over the course of the past days, the debate has changed a little. Theresa May, currently Interior Minister and one of the favorites for the job of Prime Minister Cameron, alluded that she might be using the Europeans currently living in the UK as a bargaining chip in the negotiations in Brussels.

On the Peston Show, May stated: “What’s important is there will be a negotiation here as to how we deal with that issue of people who are already here and who have established a life here and Brits who’ve established a life in other countries within the European Union. (…) There’s no change at the moment, but of course we have to factor that into the negotiations.” Foreign Secretary Philip Hammond made similar comments on Monday.

Although May and Hammond were criticised heavily for what they said – not only by Remain-supporters but also by Leave-campaigners – I guess these comments give us a bit of a foretaste how the negotiations between the UK and the EU turn out once the UK officially starts the divorce proceedings. May and Hammond have made clear that they might want to use the approximately three million Europeans currently living in the UK as bargaining counters. (According to the FT, May’s team rowed back on Tuesday, stating that “Her position is that we will guarantee the legal status of EU nationals in Britain as long as British nationals living in EU countries have their status guaranteed too.”)

Given that the negotiations will not start for a while, I find this development deeply worrying. With comments like these, and the amount of racist incidents that have been reported since the Brexit vote, the UK has already changed dramatically. To me, it seems to be a less friendly, less open place to live in. I know that it all depends on the outcome of the negotiations so I think there is no need for premature panic. But – many of my European friends share my worries and some of us fear that the climate will become more heated once the divorce talks are under way.

A long answer to a short question. Would I apply for a British passport, in some years from now, and give away my German passport that allows me to travel to a record 177 countries, visa-free, according to most recent edition of the Visa Restrictions Index? I don`t know. Maybe not. Hopefully, there will be an alternative solution to this.

So what does Angela Merkel think?

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.