20 Nov 2017

What does Merkel’s coalition crisis mean for Brexit?

UK diplomats worry that prolonged uncertainty in Germany over the formation of a new government means that officials may take control of events and that hardens the German position.

Some claim that it was German officials who shaped the setback at the European Council in October when the UK was deemed to have made insufficient progress to move on to Phase 2 of the Brexit talks.

“They are very literal,” one Whitehall source said, “and they want to create space for Merkel so she has range of options open when she engages (with Brexit).”

Chancellor Merkel, the argument runs, is more political and pragmatic and might cut a deal where senior officials wouldn’t. That said, the UK’s ability to misread Chancellor Merkel is the stuff of legend.

Meanwhile speculation swirls around what the five month old change of leadership in Dublin means for the December summit. There’s a very good account of twists and turns here (I also recommend Tony Connelly’s book “Brexit and Ireland”).

Ireland wants assurances that go beyond “no return to the hard border of the past” type formulation and they want them before the December European Council. This is seen as a moment of maximum influence that should not be lightly ceded.

One Irish government source said the Taoiseach Leo Varadkar would be “crucified” if he came back from the December Council looking like he’d sold the pass on anything that could be construed as a hard border (that, for Dublin, includes the technical wizardry and light touch checks still talked of by some in DEXEU).

The Irish government would dearly like the UK government to lay out proposals for carving Northern Ireland out of some of the arrangements that look likely for the rest of post-Brexit Britain. In a speech delivered in Brussels this morning, the EU’s chief negotiator, Michel Barnier, makes the same point. But one Whitehall source said what London is preparing is simply a form of words that comforts Mr Varadkar, not a worked out solution to the wider issue.

Michel Barnier, speaking to the Centre for European Reform in Brussels, has warned that ratification by EU Parliaments will be tricky if the UK goes down the route preferred by the more ardent Brexiteers and chooses to diverge from EU rules.

Michel Barnier’s speech was peppered with warnings for UK politicians who still think that a Brexit deal could see many of the advantages of current smooth access to the Single Market continuing post Brexit even if the UK tries to diverge from EU rules.

And he added a new warning that diverging from EU rules, could trigger hostile votes in EU parliaments as the ratification process gets under way.

All this on the day that the Exit and Trade (Strategy and Negotiations) Cabinet Committee discusses the Brexit Divorce Bill. One source from the Brexit wing of the Tories said: “The Party can cope with another 20 (billion pounds) but not more.” The same source said Cabinet ministers would start the long-delayed discussion about the end state Britain seeks some time before Christmas and that officials were preparing papers for circulation before that potentially very hairy moment.

 

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