Germany Said to Shut Door on Brexit Back Channels in Blow to May

  • Core message is EU has no pre-Article 50 wiggle room for talks
  • German chancellor holds the line: ‘We’re waiting,’ she says

Realizing the Costs of a Hard Brexit

German Chancellor Angela Merkel’s government is battening down the hatches for the coming Brexit talks, instructing officials to avoid any back-door contacts that could hand the U.K. an advantage.

Merkel’s chancellery is receiving U.K. diplomats but politely refusing to grant the U.K. any favors in advance of the official negotiations, according to two people familiar with the matter. Officials at some ministries have been instructed to shun official contacts with U.K. counterparts that could reveal negotiating positions, another person said.

Merkel at cabinet meeting on Oct. 19.

Photographer: Krisztian Bocsi/Bloomberg

The German message in private is the same as in public: that discussions can’t start until Britain presents its opening gambit after triggering Article 50 of the Lisbon Treaty, the three people said. All asked not to be identified discussing private government matters.

The unbending German line underscores Merkel’s focus on maintaining a united European Union front against the U.K., even at the risk of curbing economic ties. The stance of Europe’s key player and leader of its biggest economy suggests that some of the most fervent advocates of Brexit have miscalculated in counting on Germany to give the U.K. what it wants to ease exports of everything from cars to chocolate.

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The pound erased a gain against the dollar on the news, and was little changed at $1.2296 as of 3:09 p.m. in London.

The EU’s ban on negotiations before the U.K. invokes the exit clause applies at “all levels” of the German government, the government press office in Berlin said in an e-mailed statement. Steffen Seibert, Merkel’s chief spokesman, told reporters last week that “the chancellor has been consistent on one core message in recent months: Full participation in the EU’s single market means that the country that wants this participation must fully accept free movement -- the so-called four freedoms.”

For an indication of the U.K.’s red lines in the coming negotiations, click here

Last week, amid concern that the U.K. has been putting out feelers to the German auto and pharmaceutical industries, Merkel called on Germany’s leading business groups to support her stance that Britain can’t expect full market access if it restricts immigration from the EU. Negotiations will become “extraordinarily complicated” if “everybody does what they want,” she said.

“We’re waiting for the U.K. to trigger its exit from the European Union first,” Merkel said during a party meeting last weekend.

Cherry-Picking

That’s the public red line agreed by Merkel and other EU leaders after the Brexit referendum in June, along with an official ban on letting the U.K. cherry-pick economic advantages without accepting the EU’s free movement of goods, services, capital and people.

The refusal to grant the U.K. early talks means Prime Minister Theresa May’s announcement that she will trigger the withdrawal by April may end up reducing her leverage in the negotiations. Had she kept other governments guessing about her favored timing and eventual deal, May might have seen European unity begin to crumble as leaders lost patience and started to offer some signals about where they might compromise.

Officials in Berlin say that Germany must now put the interests of the remaining 27-member EU ahead of Britain’s. That includes rejecting U.K. attempts to float any kind of transitional deal on post-Brexit relations, one of the people said.

“The government is very clear that the vote on June 23 was a vote to ensure that we had control of movement of people from the EU into the U.K., but also we want to see the best possible access for businesses for trading in goods and services with and operating within that European market,” May told lawmakers in her weekly question session in Parliament in London on Wednesday. “That is what the government will be aiming for.”

Brexit Taskforce

While holding off the U.K., Germany is making its own preparations. A Brexit task force based at the Foreign Ministry in Berlin has drawn up a list of several hundred possible topics to be tackled, from climate change to finance, the person said.

As she seeks to keep control, Merkel may be able to count on a precedent: German industry groups backed her push for economic sanctions against Russia during the Ukraine crisis, accepting the chancellor’s argument that defending European values trumps restrictions on trade. As for German lawmakers, her government says they’ll have a consultative role during the Brexit talks but won’t be given a vote on the outcome.

“It’s not about punishing the British,” David McAllister, an EU member of parliament from Merkel’s Christian Democratic Union, told a conference in London on Monday. “But it’s also not about favorable treatment.”

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