Former Downing St Insider: Don't expect the Germans to save us now

Some would-be PMs see no deal as a bargaining chip, particularly with Europe's dominant economy. But the Germans have got their own problems to worry about.

by Anonymous
Last Updated: 19 Jun 2019

Time and again in the UK, you hear the argument that the EU – and more specifically Germany – wouldn’t allow Britain to crash out without a deal.

The cold-headed Teutons know which way their brot is buttered – they operate an enormous surplus with us, so it’s in their interests to keep the lines of trade moving, and they above all others will have to pick up the bill from Britain’s lost payments into the EU budget, so the idea of missing out on the fabled £39bn divorce settlement must chafe something rotten.

Faced with an intransigent Britain willing to leave without a deal, the Germans would step in, pulling various diplomatic levers until the rest of the EU27 saw sense.

It’s a logic particularly popular with Conservative leadership candidates. Four of the five remaining would-be PMs have effectively said they want to cut the Irish backstop out of the withdrawal agreement, and are willing to leave the EU on October 31 without a deal if such a renegotiation isn’t possible. Only Rory Stewart has refused to say "no deal is better than no Brexit".

My contacts in Brussels and Berlin don’t agree. Germany is in a difficult position generally. Merkel’s ruling CDU party is losing influence and facing a leadership transition; the Greens and the right-wing AfD are growing. All this will leave the Germans more inward-looking and conservative in their outlook,  which means France becomes more dominant – and we’ve already seen the stance Macron has taken in relation to Brexit.

To the EU as a whole, the £39bn is important, but not as material as many here would believe. Budgets would be cut, a directorate or two would be lost – the EU would like to avoid no deal and all that comes with it, but it isn’t the top issue in town, particularly after the conventional parties saw off the populists in the EU parliamentary elections.

It’s also worth remembering that European economies have improved significantly since 2008, so they’re less  intimidated by the prospect of a shock: while Italy and Greece have their issues, Spain’s doing well and Portugal’s out of special measures.

So the real questions is whether anything much has changed since the withdrawal agreement was signed, and the answer is not really. Could the threat of a no deal lead to a re-opening of the agreement? Never say never, but I very much doubt it. There’ll probably be some concessions in the political agreement, but that won’t be enough to sway this parliament.

It’s hard to know if the candidates really think their willingness to play hardball – and their sheer commanding presence – will be enough to get a deal without the backstop. It’s more likely that the demand for a new negotiated settlement is really just a message management matter for Tory activists, to ensure the EU can be blamed for a no deal if and when it comes, and to provide the next leader with a solid foundation that they can use to force the party to back them.

Maybe Europe won’t allow us to fall off the edge in the process, but if you’re looking for salvation I’d look to snails and Serrano, not sauerkraut.

Image credit: Olaf Kosinsky / Wikipedia

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