Close, yet far apart.

Photographer: Francois Pauletto/Corbis via Getty Images

German Chancellor Is the U.K.'s Best Hope

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
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The leaders of the remaining 27 European Union members have spoken on Brexit, and it would appear that they spoke with one voice. Could it be, however, that France and Germany, the EU-27’s two leaders, really have different approaches to handling the U.K.’s  departure?

The statement from their Brussels gathering this week was calm and firm: The U.K. should start the formal withdrawal process “as soon as possible,” but hopefully it will remain a close partner. It can, however, only be part of the EU’s common market if it adheres to all of its “four freedoms” -- the free movement of goods, services, capital and people.

QuickTake Britain and the EU

In theory, this opens the path to an orderly negotiation of something like the Norway scenario, under which the U.K. keeps most of its free trade benefits, subscribes to the free movement of people and acquires an “emergency brake” on immigration. Of course, that may not be so easy. Brexiters say they will reject any access deal that doesn’t give them control over their borders. And much depends on whether the German or French stance prevails in negotiations. Outwardly, French President Francois Hollande and German Chancellor Angela Merkel are “in full agreement” on Brexit. But, as usual, there are nuances to the unity. “As soon as possible” means slightly different things to Hollande and Merkel. In the French leader’s case, it stands for “no time to lose.” To Merkel, it’s a matter of “waiting calmly” until the U.K. works out the time-frame for its departure and a negotiating plan. 

Like Hollande, Merkel’s coalition partners, the Social Democrats, are impatient for talks to start, and conclude. One of them, European Parliament President Martin Schulz, has called for an immediate start to the Article 50 procedure; the context in which Frank-Walter Steinmeier, the foreign minister and another Social Democrat, has used “as soon as possible” is more Hollande-like than Merkel-like. Yet it is the chancellor who ultimately determines the German position, and the EU will probably stop pushing the U.K. to trigger Article 50 of the Lisbon Treaty right now.

Then there’s the matter of retribution. Hollande, the unpopular leader of an increasingly euroskeptic country, appears to want the U.K. and “exiteers” everywhere to be taught a lesson. He has reportedly used the word in private, saying the “difficulties and even dramas of Brexit” would soon teach populists in France and elsewhere a thing or two. He used it in public, too, as he called for an end to euro clearing operations in London. Brexit, he said, “can serve as a lesson for those who seek the end of Europe.”

That may be why Marine Le Pen, leader of the National Front and Hollande’s populist nemesis, has predicted that the EU would try to make Britons “pay for their departure” and thus expose “the tyrannical nature of its power.”

Merkel, however, has said nothing of the kind. She has sounded disappointed, even distraught, but never vengeful when talking about Brexit.

In other words, Hollande is shaping up to be something of a Brexit hawk while Merkel is more dovish. Writing for the Financial Times, German commentator Ulrich Speck suggests there may be political and historical reasons for Merkel’s less combative attitude. She doesn’t face as serious a populist challenge at home as Hollande does. She may also recall France’s heavy-handed opposition to the U.K.’s membership in the EU’s precursor organization in the 1970s.

Speck also wrote that Merkel wasn’t an idealistic European federalist but rather someone who sees the EU as a framework for countries to promote their interests. That’s arguable: Merkel is a strong backer of federalist measures such as a joint fiscal policy. Yet trying to punish the U.K. would certainly go against Germany’s economic interest, and as a conservative politician, Merkel may be more appreciative of this than socialist Hollande.

Both Germany and France send 7 percent of their exports to and get 4 percent of their imports from the U.K., with cars being the biggest source of exports for both. The U.K. absorbs 10 percent of French car exports and 13 percent of German ones. Germany’s powerful auto industry enjoys special access to Merkel: Its chief lobbyist is a former transportation minister from her party. Hurting Germany’s pride and glory, its automakers, would hardly be worth teaching any kind of lesson to the stubborn Brits. 

Germany is often accused of arm-twisting when momentous decisions are to be made, an accusation that featured prominently in the Brexit campaign. Now, however, Brexiteers should hope Merkel twists some overeager arms and prevents a retributory spanking for the U.K. If it gets a fair post-exit deal, it will be in large part thanks to her. Hollande, with his worries about a nationalist victory in forthcoming elections, will be a tougher negotiating partner. And if he perceives Merkel as too soft, the talks may turn nasty and unproductive.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor responsible for this story:
Therese Raphael at traphael4@bloomberg.net