Seeking Clarity

Business group hammers May on Brexit

Germany Britain
Hanging on in there: May and Merkel. Source: Picture Alliance/AP

Joachim Lang sounds a little fed up. When it comes to Brexit, Theresa May has “lost all sense of time. Instead of finally putting concrete goals for the future relationship on the table, London keeps delaying,” the head of Germany’s top industry association BDI complained in a statement on Friday.

It was a laying down of the gauntlet of sorts for the British prime minister, who was in Berlin for a meeting with Chancellor Angela Merkel. The two leaders can probably swap stories about Mr. Lang, who hasn’t minced words on Germany either. Last week he declared himself “unsatisfied” with a lackluster governing coalition that Ms. Merkel has put together with Germany’s Social Democrats.

He’s hardly the only corporate leader worried. The simple fact is that businesses don’t like uncertainty. And in Britain and Germany, there’s been plenty of it to go around of late.

“Cabinet members need to stop painting the post-Brexit era in golden colors.”

Joachim Lang, BDI industry association

When it comes to Brexit, Germany’s BDI is joined in its concerns by the British business lobby group Institute of Directors. In a new report, it prodded London to seek not just a free-trade deal but a “new, bespoke, and partial customs union with the EU” to protect the manufacturing sector, rather than maintain its vow to exit the accord completely.

While many in Germany believe that Britain’s exit from the customs union is unrealistic, Mr. Lang didn’t make such a specific plea in his own statement but warned that Britain is endangering its standing as a place to do business. Companies on both sides of the Atlantic need “immediate clarity” on trade and customs rules after March 2019, when Britain will formally exit the European Union. “A good future doesn’t come on its own,” he said. “The British government needs to decisively work for it.”

His target wasn’t just Theresa May. Cabinet members need to stop painting the post-Brexit era in “golden colors,” he added. That was likely a reference to Britain’s foreign secretary, Boris Johnson, who gave an impassioned speech Wednesday designed to inject some optimism into the pro-Brexit campaign and urging its detractors to focus instead on Britain’s potential outside the bloc. Mr. Lang countered that London shouldn’t entertain any “false illusions.” At the very least, London should make clear that it will fully maintain the status quo during any transition phase after March 2019, “precisely because it remains completely unclear how long it will be before a new treaty comes into effect.”

Friday’s meeting was never really going to offer the clarity that German businesses seek. The meeting was focused more on the future of security and intelligence cooperation, ahead of a speech that Ms. May was to give on Saturday at the annual Munich Security Conference. On this front, there is far more agreement. The intelligence agency heads from Germany, France and Britain in a statement Friday promised to continue cross-border intelligence sharing even after Brexit.

At a press conference, both leaders repeated their general stances on the negotiations and subtly nudged each other to get into specifics. Ms. Merkel rejected the term “frustrated,” but said she was “curious” to learn more about Britain’s goals and wanted a close partnership. Ms. May said any new economic partnership should be “bold and ambitious” and good for business, while rather defensively adding that providing more detail was “a two-way street.”

Some British media have speculated that Ms. May’s visit was intended to take her case above the head of Michel Barnier, the EU’s chief negotiator on Brexit, who complained this week of “substantial” differences on the transition and said he had “some problems understanding the UK’s position.” But Ms. May will find a rather distracted German chancellor to plead her case with in Berlin. Ms. Merkel is still fighting to get her own fourth term in government off the ground. Any efforts she has made to intervene in Brussels of late have been focused on the remaining European Union.

The 177-page coalition document agreed last week between Ms. Merkel’s conservatives and the SPD includes 9 pages on the future of the EU and euro zone. But it makes precious little mention of Britain, save for a pledge of “faithful cooperation,” a promise to protect fishing in the North Sea and an effort to lure British banks to send employees to Frankfurt. Not exactly the strong pro-British voice that Ms. May might be hoping for.

Christopher Cermak is an editor with Handelsblatt Global based in Berlin. To contact the author:

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