22 June 2016

Germany: Crossing fingers and hoping for Remain

This week German tabloid Bild devoted a two-page spread to the issue answering 49 Brexit-related questions which ranged from whether Germany could hold its own In/Out EU Referendum (not unless the German constitution were changed first), to what would happen to duty free cigarette purchases at Heathrow airport (they could be cheaper post Brexit). On Saturday, Bild’s Nikolaus Blome wrote a hard-headed piece entitled ‘What a Brex-shit!’ (helpfully also translated into English) which he slammed the campaign as “a distortion of facts, half-truths, and madness” before concluding,The Brits are on the verge of lethally weakening the West that they have shaped like no other nation. How can they do this to us – and to themselves?”

Despite the usual think-pieces accusing the Brits of “blackmail,” and “cherry-picking,” the mood as a whole has been thoughtful in Germany. Senior German politicians are praying for a Remain. Not only will Brexit impact the Germany economy adversely, but it would also catapult the R-EU into a more protectionist direction (see here). Berlin would lose a key-ally that would back its insistence on strict fiscal discipline among more wayward Southern neighbours. It’s no great secret that the prospect of being “left alone” with France without the UK as a counterweight is ringing alarm bells in the capital.

Chancellor Angela Merkel has been measured in her remarks, refraining from making any doomsday threats. She refused to connect the tragic murder of Jo Cox MP to the Referendum last week, and though she’s expressed her wish for the Britons to Remain, she’s made clear repeatedly that this is a vote for the British people.

The prospect of being stuck in the EU without the Brits has led soul-searching at the highest level. The German Finance Minister, Wolfgang Schäuble, has been arguing that this vote should serve as a wake-up call for Europe: “It cannot be business as usual,” he says. “Europe is not in a good state,” Schäuble argued at the Economic Council of his CDU party in Berlin on Tuesday. Referring to declining trust in the EU and the rise of anti-EU and right-wing parties across the bloc, he argued, “We just cannot go on like this” – even if the majority of Britons vote to Remain on Thursday, because then voters will say, “You have not understood.”

German business knows what Brexit could mean for them too. A poll of over 600 German executives for financial daily, Handelsblatt, found that 74% believe that Brexit would be economically adverse for Germany – with only 4% saying it would be positive. The paper’s Editor-in-Chief, Sven Afhüppe writes in a leader today that the lesson of the EU Referendum, regardless of its result is that, “Only reform will save Europe.”

Meanwhile, Markus Kerber, Head of the Federation of German Industry (BDI) told the BBC this morning that it would be “very, very, foolish” to impose trade barriers on Britain post-Brexit. “The BDI would urge politicians on both sides to come up with a trade regime that enables us to uphold and maintain the levels of trade we have, although it will become more difficult,” he said.

France: Retribution or rethink?

France, on the other hand, is reportedly  pushing for a “bloody Brexit,” and is more keen to see the “perfidious Albion” depart the EU, despite official statements from the likes of Prime Minister Manuel Valls that it would be “a shock” to the European economy. Roughly 4 in 10 French voters favour Brexit – higher than in any other EU member state.

Emmanuel Macron, the Economy Minister, and a potential candidate for the Presidential Election in 2017, warned that, “Leaving the EU would mean the ‘Guernseyfication’ of the UK, which would then be a little country on the world scale. It would isolate itself and become a trading post and arbitration place at Europe’s border.” Macron added, “You’re either in or you’re out. The day after an exit, there would be no more financial passport for British establishments. The European council should give the British an ultimatum on their intentions and the French president will be very clear in that respect. If the UK wants a commercial access treaty to the European market, the British must contribute to the European budget like the Norwegians and the Swiss do. If London doesn’t want that, then it must be a total exit.”

Leaving the EU would mean the ‘Guernseyfication’ of the UK, which would then be a little country on the world scale.

Emmanuel Macron, French Economy Minister

The British vote poses an existential political threat in France. The rising far-right and the increasing disillusionment in the European project in one of the ‘founders states’ could prove to be a toxic mix – especially given that the question of EU membership itself is a taboo topic in mainstream political discourse.

French President François Hollande says, “More than Britain’s future in the European Union is at stake [in the Referendum] – it is about the future of the European Union.” As Front National (FN) nips at the heels of the political establishment, its leader Marine Le Pen is cheering on the prospect of Brexit, (which she hopes will be followed by ‘Frexit.’) In her words, “I would vote for Brexit, even if I think that France has a thousand more reasons to leave than the UK because we have the euro and Schengen.” Whatever the result of the UK’s referendum, she says, “The EU is in decay, it has cracks everywhere.”

The Referendum may yet force a fundamental re-think about Europe in France too. Jérôme Fenoglio, Editor-in-Chief of French daily Le Monde today argues, “In the aftermath of this ‘In’ vote that we wish, the worst would be to continue as before. The EU must do an examination of conscience, assess what works and what doesn’t, break free from the voodoo spell of the miracles of integration and shared sovereignty, have the courage {for] an institutional reform. Or it will continue to crumble, with or without our British friends.”

Similarly, former French President Nicolas Sarkozy told journalists after a meeting with German Chancellor Angela Merkel yesterday, “I told [Merkel] that to save Europe, there would have to be a Franco-German initiative in the coming months, with a new [EU] Treaty that tells 450 million Europeans that we have heard what they are saying, that we understand how they feel. I think the Chancellor is ready…That’s all the better as there will soon be elections in France that would be followed by polls in Germany.”

I would vote for Brexit, even if I think that France has a thousand more reasons to leave than the UK because we have the euro and Schengen.

Marine Le Pen,  Leader of Front National

Whatever the outcome of the Referendum it should be clear to leaders in all EU 28 that it cannot be “business as usual.” If the British public opt for Remain on Thursday, the issue will not be settled. The debate about the UK’s EU membership will be like the one on Scottish independence – but on steroids. Unless the EU shows a willingness to reform, voters from France to the Netherlands and Denmark will soon all be pushing for their own In/Out Referendums.