Morning Briefing Global Edition

Thank You, Great Britain!

The Brexit quagmire deepened over the weekend. Some in Berlin and Brussels are pushing for David Cameron to announce the start of divorce proceedings at tomorrow’s E.U. summit. Angela Merkel asked for patience, saying there’s no reason for the negotiations to get nasty. But she seemed zombie-like, mechanical, like someone going through the motions. Her appearance recalled the description German philosopher Friedrich Nietzsche once applied to himself: “I’m still living, but without being able to see three steps in front of me.”

 

The global decline in political leadership and the rise of populism are two sides of the same coin. Britain and the United States offer similar warnings, with a different context: Loss of control is not caused by the populists, but finds its expression through them. We shouldn’t bash the outraged electorate who brought this upon us – they are like passengers in an aircraft locked in a tailspin, panicking as the pilot slumps in the cockpit. No, they shouldn’t be allowed to take over the controls, but the pilot needs to wake up.

 

Opinion leaders across Germany are weighing in on the biggest hit to European unity since World War II. Peter Terium, the CEO of German utility RWE says: “I’m shocked.” Europe’s roll in the world is weakened, and it loses its biggest voice for a free-market economy, private ownership and competition. Terium noted the gap by Britain’s departure will be costly: The United Kingdom is one of the biggest net contributors to the E.U. budget. We already have an idea how the gap will be filled.

 

Peter Gauweiler is a political maverick. The member of the Christian Social Union, the conservative sister party to Merkel’s Christian Democrats, says “Thank you, Great Britain!” According to Gauweiler, today is the first day of a new dawn – Europe’s perestroika moment is upon us. Gauweiler may be 67, but that CSU dog still has a bite.

 

But maybe not so fast. Social Democrat leader Sigmar Gabriel spoke with Handelsblatt via video link in London moments after the election results came in. A historic mistake, Gabriel concluded. “Nearly three-quarters of people under 25 voted to remain in the E.U. This is fantastic. Brexit advocate Boris Johnson will lead the U.K. into isolation, and the British will curse him one day.” If the 3 million signatures for an online petition demanding a revote say anything, it’s that many already do.

 

Handelsblatt’s chief editor, Sven Afhüppe, considers the impact Brexit will have on Angela Merkel. A business-as-usual approach to European policy is unthinkable. Otherwise, the general election next year could become an informal in or out referendum. Europe and Merkel share a similar fate.

 

Kevin O’Brien, Handelsblatt Global Edition’s Editor-in-Chief and a native New Yorker, focuses on the trans-Atlantic aspect of the debate, and his outlook is positive. Europe will resist the right-wing temptation and overcome its “character test.” If Germany and France band together to become the United States’ main partner in Europe, a new era could begin. That rosy American optimism – it’s indestructible!

 

Philipp Hildebrand, on the other hand, sees it more in black and white. The former head of the Swiss National Bank and current vice chairman of asset management at BlackRock says the European Union is no economic success story: “Since the financial crisis, an additional eight million Europeans are at risk of falling into poverty. Part of the frustration has to do with the fact that Europe has no growth strategy.” For the financial markets, he doesn’t see a crash – in principle. But to him, the banks are the Achilles’ heel.

 

Image of the Day

Euro Cup_dpa
Germany had reason to celebrate after the round of 16 match against Slovakia at Stade Pierre Mauroy in Lille, France. A 3-0 victory catapulted the German team to the next round of the Euro cup. Source: DPA
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