Germany Sees Tailor-Made Brexit Deal as U.K. Tests Patience

  • Roth to U.K.: Don’t expect ‘cherry picking’ of EU freedoms
  • Merkel says EU to negotiate ‘according to our own interests’

U.K. Warned About 'Cherry-Picking' EU Freedoms

Britain’s future relationship with the European Union requires a custom-made solution, though the U.K. won’t be able to cherry-pick the economic advantages, German Deputy Foreign Minister Michael Roth said.

As Chancellor Angela Merkel called the decision by U.K. voters to leave the EU irrevocable, Roth said in an interview with Bloomberg that there’s no template for dealing with Britain’s exit. What’s clear is that Britain can’t expect access to the bloc’s common market unless it allows the free movement of workers that applies throughout the EU, said Roth, the government minister responsible for European affairs.

“This is a historically unique situation,” Roth said on Wednesday. “Britain is a major economy and has been an EU member for decades. We will surely reach a custom-fit agreement between the EU and Britain.” At the same time, he said “there won’t be any cherry-picking,” echoing a phrase used by Merkel.

As European policy makers seek to chart the way forward, Roth’s comments suggest that EU relations with countries outside the bloc such as Norway and Iceland may not serve as a model for a treaty with Britain. Another German official, who asked not to be identified discussing government deliberations, expressed frustration with a lack of signals from London and said the U.K. government may be underestimating the complexity of the talks that lie ahead.

EU Interests

U.K. Prime Minister Theresa May has promised to respect the wishes of an electorate which voted on June 23 to take Britain out of the EU. Single-market access particularly affects Britain’s financial services sector: U.K. banks are concerned about retaining their so-called passporting rights, which allow them to deal with clients across the EU.

“I regret the British public’s decision but we have to recognize it” and it’s “irreversible,” Merkel said in an interview posted on her party’s website on Thursday. “Now we have to negotiate according to our own interests.”

Roth expanded on the idea, saying it “must be made clear that free access to the internal market is only possible when all four of the fundamental freedoms are respected, including, naturally, the free movement of labor.”

BGA, a Berlin-based trade association representing German exporters and wholesalers, said “the vast majority” of its members “expects that governments don’t give countries leaving the EU any special privileges.” Eight out of 10 of companies don’t expect Brexit to cause “significant disadvantages,” BGA board member Carsten Taucke said in a speech.

Merkel Meeting

Almost two months after the Brexit referendum, May’s team is weighing what it wants to seek in talks with the EU. Roth urged her government to formally declare Britain’s exit, the condition for the starting the talks, and “present a road map.”

Merkel hosts European Union President Donald Tusk for talks at a manor near Berlin on Thursday evening to prepare for a meeting of all EU leaders except Britain’s in Bratislava on Sept. 16. Tusk, EU government leaders and European Commission President Jean-Claude Juncker have said there’s nothing to negotiate with the U.K. until May’s government submits its notice to leave the EU.

“We’re seeing a great deal of uncertainty right now,” Roth said. “There’s a fundamental understanding in the EU that the British government needs to reach clarity first. But things shouldn’t be put on the back burner, either.”

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