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It is in Germany’s interests to avoid Brexit

Ever since British Prime Minister David Cameron announced in January 2013 that he would hold a referendum on a renegotiated British EU membership agreement writes Daniela Schwarzer, Berlin has been a top destination for British policymakers and diplomats intent on exploring what renegotiated membership might look like. Given Germany’s increased weight in European policymaking, France’s current weakness, and Poland’s preoccupations with upcoming elections, Cameron will have to give this conversation priority if he wants to place the question of EU membership before British voters by 2017.

The good news for London is that the German government has a strong interest in keeping the U.K. in the EU, especially for economic reasons. The U.K. overtook France as the second-largest economy in the EU in 2014. But Britain is not only a market in Berlin’s eyes. Like Warsaw, Berlin sees the U.K. as a strong proponent of the single market and a country that traditionally subscribes to the idea that competition rather than political interventionism is a driver for innovation and growth. There is therefore some sympathy for Britain’s push for the EU to cut red tape and do less, in particular because the German domestic debate now includes a euro-skeptic voice with the right-wing populist party Alternative für Deutschland (AfD).

There are, of course, differing traditions of macro-economic thinking, and Britain’s foreign policy tends to be closer to that of the United States or even France. But as the U.K. is not anywhere close to joining the euro, these differences are not a major concern for the Germans, who continue to view economic growth and fiscal policy predominantly through a neo-classical lens and spend enormous amounts of political energy on making sure the eurozone follows this paradigm.

The foreign and security aspect of Britain’s role in the European Union is also important to Berlin. Germany itself has become more active in these arenas, including as one of the primary EU negotiators with Russia, along with France. The German government has decided to strengthen its crisis anticipation and management capacities and has reaffirmed its commitment to a strong rules-based order, both in Europe and globally. From Berlin’s perspective, an EU that includes the U.K. is needed to pursue these priorities. A situation whereby the EU’s foreign relations are largely determined by the Big Three of France, the U.K., and Germany is preferable to a Franco-German approach. This, however, requires the UK to be more proactive than of late.

Germany also understands the symbolic value of Britain remaining in the EU. The acrimonious exit from the EU of such a large member state would be a huge blow to the EU’s credibility just as the Union and Western values more broadly are being increasingly challenged, notably by Russia. Britain’s exit would comfort euro-skeptics that claim the EU is unable to reform.

But there are limits in substance and style to what Germany believes is acceptable. Berlin is as sensitive to being pressured as it is about populist politics. The idea of cutting red tape and deepening the single market will certainly gain traction in Berlin, as will some restrictions on so-called “welfare tourism.” But Berlin will not agree to weaken the free movement of people in the EU. There are also concerns that negotiating treaty amendments without a clear mandate could produce a result that cannot be ratified by all 28 member states. Despite its strong interests to see Britain remain in the European Union, Germany will not cross every line to accommodate Cameron’s wishes.

Dr. Daniela Schwarzer is based in Berlin and is the GMF’s Senior Director for Research and Director of the Europe Program. This article was first published by the GMF.


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