German Reaction

'Finally' a Brexit Plan

Belgium EU Summit
Let the serious negotiations begin. Source: AP Photo/Geert Vanden Wijngaert

Germany’s top two ministers below Chancellor Angela Merkel summed it up best. “Finally a little more clarity,” was the identical response of Foreign Minister Frank-Walter Steinmeier and Deputy Chancellor Sigmar Gabriel to British Prime Minister Theresa May’s long-awaited speech unveiling her plans for Brexit Tuesday.

The German government will likely have more to say Wednesday after a cabinet meeting to decide its next moves. For now, the initial response of German officials and economists has largely been one of relief that the battle lines have finally been drawn. Mr. Gabriel, who also serves as the country’s economics minister, praised Ms. May’s plan as “forceful” and said it was time to quickly begin an “orderly” process of exit.

But there was also a determination across political parties to hold the line as negotiations with Britain move forward.

“Brexit will limit growth opportunities on both sides of the Channel.”

Volker Treier, DIHK

“Anyone who wants a hard break should get it,” said Thomas Oppermann, head of the Social Democratic faction in Germany’s parliament. Volker Kauder, his counterpart on the Christian Democratic side, agreed: If Britain wants a clean break, so be it, but he stressed that it means Britain shouldn’t expect to glean the advantages of the European Union, either.

Their comments come after Ms. May confirmed Britain will push for what’s being called a “hard Brexit” – a full departure from the bloc, including exiting the E.U. single market for trading goods and services and instead negotiating a separate free-trade deal with the European Union.

Much of Germany’s economic community was a little more forgiving, warning that such a “hard Brexit” will entail economic costs for both sides. “Brexit will limit growth opportunities on both sides of the channel,” said Volker Treier, head of foreign trade at the German chamber of commerce and industry, DIHK.

Clemens Fuest, head of the Munich-based Ifo Institute, one of Germany’s best-known think tanks, called for “as comprehensive a free-trade deal with Britain as possible” that protects integration, especially in the services market. He also called for extending the negotiating period beyond two years – the time it’s supposed to take the E.U. and Britain to reach an agreement.

Germany’s financial community by contrast may be more welcoming of Ms. May’s hard Brexit plans, as many expect it could mean more jobs will flow to the country’s financial capital Frankfurt if London-based banks lose the right to do business across the European Union.

Hans-Walter Peters, head of Berenberg bank and president of Germany’s banking association, said he “regretted” Britain’s decision, but couldn’t stop himself from offering the clear silver lining: “I am convinced that Frankfurt will profit from a British exit from the E.U.,” he said.

 

To contact the author: cermak@handelsblatt.com

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