18 Jan 2013

View from Berlin: Bluffing Britain losing friends

A quick visit to Berlin begins with the arresting sight of two princesses at the front of the plane. Yesterday Princesses Beatrice and Eugenie followed in their father’s footsteps as ambassadors for UK trade. Their mission: drive a UK-manufactured-for-a-German company Mini around the Brandenburg Gate.

Anglo-German relations are cooler as a result of our government’s attempt to reset the relationship with the EU.

An influential CDU MP Gunther Krichbaum warned against British “blackmail” last week. The delay to “the speech” continues the general bewilderment about what exactly Britain wants back.

My sense from Berlin is that goodwill has been drained and that Britain is running out of friends as even Berlin loses patience. Separately, one of the most senior policymakers in the EU just laughed, when I asked him about the UK leaving the EU: “You really think Britain is going to leave?”. His message seemed to be that Europe thinks Britain is bluffing.

Various UK attempts to forge a repatriation bloc within the EU-27 seem to have failed, mainly because such efforts are reported straight to Berlin. For example, there had been a discussion with euro-outs such as Poland about how exactly European Council meetings should work: allow the €-group to caucus first and then see the EU-27 bounced into its decisions, or give the €-group the final say? On specific powers, the Dutch were approached, not least as the planned hosts of David Cameron’s speech. The Dutch approach to repatriation is about powers returning for all 27 members, not the start of an auction where every nation cuts a special deal.

In particular the veto of December 2011, received triumphantly on Fleet Street, was a disaster in terms of diplomatic goodwill. It is not forgotten that for six months the UK lectured the eurozone to forge a fiscal union to save the single currency (“remorseless logic”/”make up or break up”), and then promptly vetoed developments in that direction, in the early hours of a crisis summit, with no support from allies.

There are four ways that UK-EU developments could go. 1. Actual repatriation of serious powers. 2. Symbolic repatriation. 3. Cameron backs down 4. Britain leaves EU. Berlin has calculated that Mr Cameron has very little diplomatic back-up. My sense is that if Mr Cameron genuinely wants to change the terms of Britain’s relationship with the EU, he might want to ensure he has some rock-solid allies in Warsaw, Amsterdam and Stockholm. Forcing the French into proper CAP reform (eg: spending far less than 40 per cent of EU spending on subsidising farming, for example, might create a proper pro-growth rallying point for EU reform).

Importantly that means there is little appetite for giving the PM even a symbolic diplomatic victory, let alone an actual victory. So there’s a presumption that the PM will back down, which if wrong, could yet lead to option 4.

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